Investigation summaries

Police

Operation Genoa

Allegation

In 2017, IBAC commenced Operation Genoa following a Victoria Police notification that information had been received that a Detective Leading Senior Constable was attending an adult entertainment venue and associating with the manager.

Operation Genoa sought to determine whether the Detective Leading Senior Constable had an inappropriate relationship with the manager, the extent of the relationship and whether the Detective Leading Senior Constable had any criminal involvement or was potentially compromised in his position as a Victoria Police officer.

Outcome

IBAC found the Detective Leading Senior Constable had an ongoing association with the adult entertainment venue and received favourable treatment in the form of free entry and alcohol.

IBAC also substantiated allegations the officer accessed Victoria Police information holdings to obtain information about his associates. On at least one occasion, the officer accessed and disclosed police information to an employee of the adult entertainment venue.

The officer resigned from Victoria Police while under investigation. He was charged and subsequently pled guilty to two charges of unauthorised access to police information, one charge of unauthorised use of police information and one charge of unauthorised disclosure of police information. He was fined $3000 without conviction.

Opportunities

IBAC identified opportunities for Victoria Police to review its procedures for preventing and detecting information misuse, and to strengthen its audits of information systems. It was suggested that Victoria Police consult with the Office for Victorian Information Commissioner regarding these opportunities.

Victoria Police responded in December 2018 regarding the development of a more robust information security framework.

IBAC publishes responses to our investigations to inform the community about actions agencies advise they are taking, and to share learnings that may help other agencies improve their systems and practices to prevent corruption and misconduct.

View Victoria Police's response to Operation Genoa

View the case study

Operation Oldfield

Allegation

In February 2014, IBAC received a notification from Victoria Police about allegations of interference in a prosecution by a Leading Senior Constable who worked as a police prosecutor.

The prosecution concerned a person charged with driving at a dangerous speed. This person was an acquaintance of the Leading Senior Constable; no conflict of interest was reported. The officer was accused of interfering in favour of the person charged with the speeding offence, by downgrading their charges.

It was also alleged the Leading Senior Constable had supplied police information to a criminal syndicate and associated with people involved in trafficking drugs.

Outcome

IBAC substantiated the allegation that the Leading Senior Constable interfered in the prosecution of the person charged with the speeding offence. IBAC did not substantiate the second allegation regarding the selling of police information to a criminal syndicate.

The substantiated matter was referred to Victoria Police’s PSC which charged the officer with perverting the course of justice and misconduct in public office.  However, the matters did not proceed to court. The Leading Senior Constable was subject to a formal inquiry by Victoria Police and dismissed. He successfully appealed the dismissal decision at the Police Registration and Services Board and resumed duties within Victoria Police.

Opportunities

A number of organisational issues were identified as part of Operation Oldfield. IBAC identified opportunities to strengthen Victoria Police policies, and oversight of, the conduct of police prosecutors. In this case a lack of oversight and the significant discretion provided to police prosecutors allowed the LSC to withdraw and re-categorise charges undetected.

In 2016 and 2018, Victoria Police provided responses to IBAC, outlining the actions it had taken to address the corruption and misconduct vulnerabilities identified in Operation Oldfield.

IBAC publishes responses to our investigations to inform the community about actions agencies advise they are taking, and to share learnings that may help other agencies improve their systems and practices to prevent corruption and misconduct.

View Victoria Police's responses to Operation Oldfield

View the case study

Operation Ross

Allegation

In March 2015, IBAC received CCTV footage from Victoria Police showing the alleged mistreatment of a woman in custody in the cells of the Ballarat police station in January 2015. The woman, who had been arrested for public drunkenness, was later revealed to be a serving police officer on leave for medical reasons.

Given the seriousness of the allegations, IBAC subsequently commenced an own motion investigation named Operation Ross.

The investigation expanded to examine:

  • incidents involving alleged excessive use of force against other people at the Ballarat Police Station
  • Victoria Police data which indicated the complaint profile of Ballarat Police Station was a cause for concern (including the over-representation of sergeants in complaints)
  • the response of senior police managers at the divisional level, as well as Professional Standards Command (PSC), to that concern.

As part of IBAC's investigation, public hearings were held at Ballarat Law Courts in May 2016.

Outcome

The IBAC investigation found that:

  • there was evidence of systemic issues at Ballarat Police Station including excessive use of force and questionable treatment of vulnerable people.
  • Victoria Police data indicated the complaint profile of the station was a cause for concern, including the over-representation of sergeants in complaints.
  • there were serious shortcomings in Victoria Police policies and practices including oversight regarding promotions, interventions when an officer has multiple complaints, and compliance with the strip search policy and the Charter of Human Rights.

While beyond the scope of Operation Ross, IBAC's report also notes a potential area of law reform for the Victorian Government to consider - the decriminalisation of public drunkenness.

IBAC has made recommendations to Victoria Police to address these issues, and also recommended that Victoria Police consider whether charges should be brought in relation to the January 2015 incident.

The investigation was the subject of a special report to State Parliament in November 2016. Victoria Police provided a progress report in response to IBAC's Operation Ross special report in July 2018.

Operation Yarrowitch

Allegation

IBAC commenced an ‘own motion’ investigation, Operation Yarrowitch, in January 2016, concerning a police officer (referred to as First Constable Y) who had been the subject of two previous complaints relating to alleged use of illicit drugs. Victoria Police’s Professional Standards Command (PSC) initially investigated both complaints. IBAC reviewed these investigations and identified additional lines of inquiry that could be pursued.

Outcome

Operation Yarrowitch established that a sibling of First Constable Y was involved in the use and trafficking of illicit drugs, and that First Constable Y was at the very least aware of his drug use.

IBAC investigators executed a search warrant on the private residence of First Constable Y and found quantities of cocaine and MDMA (allegedly belonging to First Constable Y’s brother) and seized electronic devices. 

Private examinations were also conducted. First Constable Y denied under oath using drugs while a police officer. When presented later with evidence to the contrary, First Constable Y made admissions to illicit drug use while a serving police officer. 

IBAC has charged First Constable Y with making a false or misleading statement to IBAC and four counts of perjury in relation to evidence given during the private examinations.

Operation Yarrowitch featured in a Special report concerning illicit drug use by Victoria Police officers: Operations Apsley, Hotham and Yarrowitch, tabled in December 2016.

IBAC has made recommendations to Victoria Police to undertake a comprehensive review of illicit drug use by its officers, with the objective of strengthening its policies, systems and practices to detect and prevent such conduct. 

Victoria Police has provided IBAC with a progress report (and will provide a final report by 30 June 2018) on development and implementation of a more robust framework to prevent and detect police illicit drug use. These reports will be published on IBAC's website.

Operation Hotham

Allegation

In October 2014 IBAC commenced an ‘own motion’ investigation, Operation Hotham. The investigation centred on allegations that a serving police officer was:

  • involved in using and supplying illicit drugs 
  • closely associating with persons involved in the supply of illicit drugs 
  • assisting and protecting drug suppliers.

Outcome

The investigation found the officer was a user of illicit drugs, and was closely associated with people involved in significant criminal activity. There was also evidence the officer protected an associate from law enforcement attention.

IBAC determined against pursuing criminal charges against the officer and referred the matter back to Victoria Police to instigate disciplinary proceedings. The officer resigned under investigation from Victoria Police the day before a discipline hearing was to take place in November 2015.

Operation Hotham featured in a Special report concerning illicit drug use by Victoria Police officers: Operations Apsley, Hotham and Yarrowitch, tabled in December 2016.

IBAC has made recommendations to Victoria Police to undertake a comprehensive review of illicit drug use by its officers, with the objective of strengthening its policies, systems and practices to detect and prevent such conduct. 

Victoria Police has provided IBAC with a progress report (and will provide a final report by 30 June 2018) on development and implementation of a more robust framework to prevent and detect police illicit drug use. These reports will be published on IBAC's website.

Operation Apsley

Allegation

In June 2015, IBAC commenced an investigation into an allegation that a police officer at a metropolitan station was trafficking and possessing drugs of dependence for their own personal use and to sell to other officers of Victoria Police. By September 2015, the investigation had revealed an interconnected social network of sworn police officers and civilians, each suspected of using (and in some cases trafficking) illicit drugs. Operation Apsley was subsequently expanded to examine the conduct of these police officers.

Twelve police officers were subject to targeted drug tests during Operation Apsley. Four returned positive results for drugs of dependence including cocaine, ecstasy and methamphetamine. A further two officers returned negative drug tests but later made admissions under oath to using illicit drugs during their police careers. 

As part of IBAC’s investigation, between August 2015 and April 2016, 23 private examinations were conducted with 17 individuals, including 12 police officers and five civilians.

Outcome

Operation Apsley featured in a Special report concerning illicit drug use by Victoria Police officers: Operations Apsley, Hotham and Yarrowitch, tabled in December 2016.

As a result of Operation Apsley, one officer was dismissed from Victoria Police, two resigned under investigation, one was admonished and allowed to return to work, and two remain suspended awaiting criminal and/or discipline proceedings.

IBAC also charged one officer with the offence of inciting a witness to mislead IBAC. A second was charged by Victoria Police in relation to drug offences. IBAC has made recommendations to Victoria Police to undertake a comprehensive review of illicit drug use by its officers, with the objective of strengthening its policies, systems and practices to detect and prevent such conduct. 

Victoria Police has provided IBAC with a progress report (and will provide a final report by 30 June 2018) on development and implementation of a more robust framework to prevent and detect police illicit drug use. These reports will be published on IBAC's website.

Operation Blyth

Allegation

IBAC received a complaint detailing allegations that a vulnerable woman had been assaulted and mistreated while in the custody of Victoria Police members at an outer Melbourne station.

Given the seriousness of the allegations, the complaint proceeded to investigation.

Operation Blyth looked into whether officers used excessive force against the woman during arrest and while in custody, and if they prevented her from going to the toilet.

Outcome

After reviewing CCTV footage, interviewing key people and other investigative techniques, IBAC concluded the police members involved had acted appropriately. The complaint was closed with no further action.

Operation Darby

Allegation

In February 2010, a complaint was lodged with the then Office of Police Integrity alleging excessive force and racial discrimination by Victoria Police during the arrest of Mr Nassir Bare. The OPI decided to refer the matter to Victoria Police for investigation, however, that decision was subject to legal proceedings, which resulted in the Court of Appeal returning the matter to IBAC to make a fresh decision in relation to the correct course for dealing with the complaint.

Following a thorough assessment of the matter IBAC decided to investigate the original allegations.

Outcome

IBAC interviewed Mr Bare, the subject police officer, civilian and police witnesses, and reviewed available documents from the time, including medical records and Victoria Police records. IBAC concluded there was insufficient evidence to substantiate the original allegations. The complaint was closed with no further action.

The investigation was subject of a special report to State Parliament in May 2016.

Operation Herbert

Allegation

In July 2013, Victoria Police notified us of a complaint that a member of its Witness Protection Unit had disclosed information about a person who had been in the Victoria Police witness protection program.

Outcome

Our investigation found the member had released information as part of an application to the Supreme Court of Victoria. As a result we found the allegation against the police member to be unsubstantiated. The conduct was part of a lawful process which required the Court to consider certain documents relating to the witness, in the public interest. We informed all interested parties of this outcome, including the Chief Commissioner of Police.

Operation Hydrogen

Allegation

In February 2013, the Victorian Ombudsman notified us of a complaint made by a senior police officer about Victoria Police management.

In November 2013, Victoria Police notified us of a complaint by the same officer alleging detrimental action in response to his earlier complaint by members of the Victoria Police senior command.

Taken together, the complaints included allegations of:

  • poor treatment during an internal investigation and denial of natural justice
  • detrimental action in a return to active duty to an inferior position, despite the basis for the initial investigation having been found to be unsubstantiated
  • lack of action by senior command in responding to the matter.

Outcome

Our investigation found that:

  • Victoria Police took reasonable steps in response to the initial allegations. However, subsequent multiple investigations conducted into the allegations had taken over 18 months
  • IBAC could identify no evidence that any person at Victoria Police intended such a delay. Victoria Police took reasonable steps to ensure the senior officer was updated on the progress of investigations, and provided appropriate welfare and support assistance
  • the transfer of position offered following the investigations was appropriate and commensurate with the rank, skills and experience of the senior officer.

Victoria Police and the senior officer were informed of the outcomes of our investigation in February 2014.

Operation Styx

Allegation

We received information from Victoria Police concerning the unauthorised disclosure of sensitive information by a member of the Victoria Police Professional Standards Command (PSC) to a serving police member under investigation. The allegations were exposed during an interview with an officer during the course of PSC Operation Clinique.

Sensitive documents identified as being accessed and printed by an officer, were located by police whilst conducting unrelated inquiries. This prompted the start of Taskforce Keel, formed to explore links between members of the Victoria Police and criminal elements, including members with links to outlaw motor cycle gangs.

The allegations made were that a target of Operation Clinique (Target 1) recounted that another target (Target 2) had received information concerning covert methodologies being used in the investigation of him. This information allegedly came via an intermediary who had allegedly been warned by a member of PSC.

Outcome

In the course of witness interviews and private coercive witness examinations, the evidence from those directly concerned supported an IBAC finding that the now former member of PSC (who had since been promoted to another area of Victoria Police) had improperly leaked the highly sensitive information in question. The former PSC member was an unsatisfactory witness, stating he could not remember the incident but was not prepared to deny it may have occurred.

As a result of IBAC's investigation, Victoria Police took disciplinary action, admonishing the former PSC member.

Operation Snowy

Allegation

Operation Snowy investigated alleged corrupt behaviour of a member of Victoria Police in the Benalla Crime Investigation Unit. On 12 July 2013, we received an anonymous complaint alleging disgraceful, unethical, unprofessional and corrupt behaviour by a member of police in regional Victoria, involving the purchase of a vehicle involved in an investigation and misuse of a police vehicle for private use.

Outcome

The investigation found that the allegation that the officer used his position to advantage himself to be unsubstantiated. The allegation against the officer misusing a police vehicle was also unsubstantiated.

We recommended Victoria Police consider the ethics of an officer involved with property from his/her own investigations.

Operation Tamar

Allegation

An allegation was made that police officers at a metropolitan police station were falsely issuing penalty notices. These were mostly for smoking in the local mall against known offenders, without the notices ever being served on the offender. The allegation was that the practice had been adopted to secure impressive work performance statistics.

Outcome

We found the allegations were without foundation, and no pattern of misconduct could be established. We notified the Chief Commissioner of Police in January 2014.

Victoria Police Operation Plyers

Allegation

In May 2013, Victoria Police notified us of an internal complaint regarding an investigation codenamed Operation Plyers, an offshoot from the Petra Taskforce which had commenced in 2008.

Petra Taskforce was established to investigate alleged Victoria Police member connections to the 2004 murder of police informers Mr Terrence and Mrs Christine Hodson. The Taskforce was supervised by a steering committee which included members of Victoria Police senior command, as well as a Deputy Director of OPI. The principal allegation was that an officer in the Petra Taskforce had authorised the discontinuance of criminal charges that a key witness was facing in exchange for information being provided. This had allegedly been done without any prior approval.

The investigator had struck an agreement with a person charged with serious offences, who had undertaken to provide the information. The information and level of cooperation was subsequently considered by the investigator to be insufficient, and the agreement was not fulfilled. The defendant subsequently successfully relied on the agreement to avoid trial and asset confiscation.

Outcome

We found there was no record of the Petra Taskforce steering committee or any member of the committee (or any other person or body) approving the agreement. It is also clear that the Office of Public Prosecutions was not consulted about the agreement. As a result, we concluded there was no sufficient basis for a finding that the investigator was authorised to enter into the agreement.

We also found no unprofessional, inappropriate or improper relationship between the investigator and the defendant.

We noted the internal complaint was not made to PSC until August 2011, and there was a further lapse of almost two years until the matter was notified to us. These delays, considered to be innocent, complicated our enquiries.

We referred the matter – insofar as it related to the conduct of the Operation Plyers investigator and any possible disciplinary proceedings – to the Chief Commissioner of Police in December 2013.

We have since been notified by Victoria Police of its further investigation into the conduct of the investigator, resulting in the complaint allegations being ‘unable to be determined’. Victoria Police do not intend to take any further action.

Operation Warrego

Allegation

In early 2013, we received information about possible unauthorised access to the Australian Transaction Reports and Analysis Centre (AUSTRAC) financial transactions database, by a Victoria Police officer.

The alleged unauthorised access, by a Detective Senior Constable in a metropolitan Criminal Investigation Unit, was for information about a known criminal, with a request that the information be sent to a private email address.

Outcome

Our investigation established that the request for information was for legitimate police purposes, with the private email address used (albeit contrary to police protocols) due to the police officer being on leave at the time.

In notifying Victoria Police, a number of issues were drawn to the attention of the Chief Commissioner of Police, including the receipt and use of AUSTRAC information by members of police, and work conducted by police officers whilst on recreational leave.

Operation Wren

Allegation

In 2010, OPI commenced Operation Wren, an 'own motion' investigation into the outcome of a Victoria Police Ethical Standards Department (ESD) investigation, into alleged misconduct by members of the Mounted Branch. 

In 2008, officers of the Mounted Branch complained to ESD about the conduct of fellow officers which resulted in them being suspended from duty. As a result of advice from the Office of Public Prosecutions (OPP), the suspended officers were not prosecuted. Nor were disciplinary charges proceeded with after the officers were deemed to be medically unfit.

The complainants, who were subsequently assessed by the Ombudsman as whistleblowers, then submitted written complaints to OPI. The complaints comprised more than 50 allegations against eight police members, ranging from unlawful disclosures of telephone intercept material and confidential information, to inappropriate interference with witnesses and preparation of the criminal brief.

The OPI investigation involved a review of an allegation of detrimental action lodged by one of the complainants with the Ombudsman, and identified a number of issues relating to Victoria Police’s dismissal procedures, internal witness support program and whistleblower protections. These matters have been considered separately by Victoria Police in response to its own investigations.

Outcome

We completed the investigation of this matter and found allegations that the ESD investigation had not been managed properly and/or had been interfered with or undermined improperly to be unsubstantiated.

We also found no evidence to support serious allegations that the identities of internal witnesses had been improperly or inappropriately revealed, or that telephone intercept material had been leaked unlawfully.

We informed the Chief Commissioner of Victoria Police of its findings.

Councils

Operation Geary

Allegation

In March 2019, IBAC received a notification from a metropolitan council under section 57 of the Independent Broad-based Anti-corruption Commission Act 2011 alleging that two Council employees were favourably allocating civil works contracts to a panel contractor, a company owned by the relative of one of the employees (Employee A).

Outcome

IBAC did not substantiate the allegations of corrupt conduct. It was found that Employee A had declared their conflict of interest in relation to their relative. However that employee did not properly manage their conflict of interest while involved in contract management activities involving their relative's company. It was also found that Employee A failed to declare and manage a further conflict of interest that resulted from immediate family members being engaged by the relative's company.

Opportunities

IBAC identified opportunities for the Council to strengthen its conflict of interest policies and procedures having regard to provisions in the Local Government Act 2020, to improve staff awareness and managerial oversight of conflicts of interest, and to address procurement issues related to panel contractors' reliance on sub-contractors.

The Council advised of actions taken to address these vulnerabilities in February and May 2021. The consolidated response of the Council response is as follows:

Conflicts of interest

Council has been reviewing its Conflict of Interest Policy in accordance with the provisions of the Local Government Act 2020 and in respect of the specific points outlined in IBAC’s correspondence.

In relation to supervisors understanding their obligations to actively and effectively manage the conflicts of interest of the employees and contractors they manage, Council has revised its Conflict of Interest Policy which includes a section on managing conflict of interest as well as detail regarding the responsibilities each of – staff and contractors, managers and supervisors, suppliers and the internal Governance Unit. In relation to employees and contractors understanding their obligations to identify, declare and manage conflicts of interest, Council refers to guidance provided in the revised Conflict of Interest Policy related to identifying and declaring conflicts of interest. Council also provides induction and follow up training of staff in relation to conflicts of interest as referenced in its Staff Code of Conduct.

In relation to recording and communicating any conflict of interest declarations and associated management plans to relevant supervisors, Council notes that sections 4 and 5 of the revised Conflict of Interest Policy list specific responsibilities of the Council’s Governance Support Unit, which include:

  • maintaining a register of conflicts of interest declarations made and included on the register
  • ·notifying management of every conflict of interest declaration made and included on the register
  • ensuring the conflict of interest register is available only to line management and to others where required by law (such as the Local Government Inspectorate)
  • issuing a reminder to all staff at least twice each year of their obligations to declare conflicts of interest in accordance with this policy
  • periodically reminding line managers of the existence of declared conflicts and reinforcing control measures
  • reviewing the Conflict of Interest Policy in accordance with the policy review cycle.

In addition, Council is developing a process for an annual attestation by managers in relation to a number of governance, compliance, finance and risk matters. It is proposed that managers will be required to submit an annual declaration in relation to the management of conflicts of interest, commencing July 2021.

Procurement

In relation to risk management around Council’s engagement of companies or other suppliers in which Council employees or contractors have an interest, the measures Council has adopted include:

  • Council’s revised Conflict of Interest Policy.
  • Council’s Staff Code of Conduct (Code), the purpose of which includes setting out Council’s expectations of staff at all levels in performing duties or acting on behalf of the Council.
    • The Code sets out a consistent approach to, and common understanding of, the behaviours, standards, values and ethics required in all work activities, including Conflicts of Interest.
    • The Code is available for all employees to access on Council’s internal intranet site.
    • All new employees are provided a copy of the Code as a component of their contract of employment and are required to sign off on the policy. These details are filed in their personnel file.
    • All new employees are required to complete various e-learning modules at the commencement of their employment and at periodic intervals thereafter. One of the e-learning modules specifically relates to the Code.
    • All new employees are required to attend a Corporate Induction and at this session a member of the HR Services team attends and provides an overview of various HR related matters and specifically addresses the expectations of employment at Council, including reference to the Code.
    • On-site departmental inductions are also undertaken for new employees and contractors by the Branch Managers and People Leaders. These inductions include reference to the requirement to abide by all Council policies including the Code.
    • Council is implementing a process to issue a reminder to staff twice each year about the existence of the Code, which will request that all staff re-familiarise themselves with the Code and their obligations under the Code. The reminder will include a brief note about what the Code requires of staff and the particular aspects of the Code to which they should refer.
    • The Code is also embedded into various aspects of Council’s corporate values. The Council’s values are continually referred to in the way Council approaches its work and its dealings with the community.
    • The Code is enforced by all people leaders at Council and any staff member who does not abide by this policy is promptly and respectfully reminded of their obligations.
    • Depending on the severity of the breach the matter may be referred to Human Resources and an investigation may occur. Any substantiated breaches of the Code may result in disciplinary action and this may also involve termination of employment. All employees are provided procedural fairness through any such formal process.
    • Every three years, employees are required to undertake a refresher e-learning training session in the Code.

Conflicts of interest

Council has been reviewing its Conflict of Interest Policy in accordance with the provisions of the Local Government Act 2020 and in respect of the specific points outlined in IBAC’s correspondence.

In relation to supervisors understanding their obligations to actively and effectively manage the conflicts of interest of the employees and contractors they manage, Council has revised its Conflict of Interest Policy which includes a section on managing conflict of interest as well as detail regarding the responsibilities each of – staff and contractors, managers and supervisors, suppliers and the internal Governance Unit. In relation to employees and contractors understanding their obligations to identify, declare and manage conflicts of interest, Council refers to guidance provided in the revised Conflict of Interest Policy related to identifying and declaring conflicts of interest. Council also provides induction and follow up training of staff in relation to conflicts of interest as referenced in its Staff Code of Conduct.

In relation to recording and communicating any conflict of interest declarations and associated management plans to relevant supervisors, Council notes that sections 4 and 5 of the revised Conflict of Interest Policy list specific responsibilities of the Council’s Governance Support Unit, which include:

  • maintaining a register of conflicts of interest declarations made and included on the register
  • ·notifying management of every conflict of interest declaration made and included on the register
  • ensuring the conflict of interest register is available only to line management and to others where required by law (such as the Local Government Inspectorate)
  • issuing a reminder to all staff at least twice each year of their obligations to declare conflicts of interest in accordance with this policy
  • periodically reminding line managers of the existence of declared conflicts and reinforcing control measures
  • reviewing the Conflict of Interest Policy in accordance with the policy review cycle.

In addition, Council is developing a process for an annual attestation by managers in relation to a number of governance, compliance, finance and risk matters. It is proposed that managers will be required to submit an annual declaration in relation to the management of conflicts of interest, commencing July 2021.

Procurement

In relation to risk management around Council’s engagement of companies or other suppliers in which Council employees or contractors have an interest, the measures Council has adopted include:

  • Council’s revised Conflict of Interest Policy.
  • Council’s Staff Code of Conduct (Code), the purpose of which includes setting out Council’s expectations of staff at all levels in performing duties or acting on behalf of the Council.
    • The Code sets out a consistent approach to, and common understanding of, the behaviours, standards, values and ethics required in all work activities, including Conflicts of Interest.
    • The Code is available for all employees to access on Council’s internal intranet site.
    • All new employees are provided a copy of the Code as a component of their contract of employment and are required to sign off on the policy. These details are filed in their personnel file.
    • All new employees are required to complete various e-learning modules at the commencement of their employment and at periodic intervals thereafter. One of the e-learning modules specifically relates to the Code.
    • All new employees are required to attend a Corporate Induction and at this session a member of the HR Services team attends and provides an overview of various HR related matters and specifically addresses the expectations of employment at Council, including reference to the Code.
    • On-site departmental inductions are also undertaken for new employees and contractors by the Branch Managers and People Leaders. These inductions include reference to the requirement to abide by all Council policies including the Code.
    • Council is implementing a process to issue a reminder to staff twice each year about the existence of the Code, which will request that all staff re-familiarise themselves with the Code and their obligations under the Code. The reminder will include a brief note about what the Code requires of staff and the particular aspects of the Code to which they should refer.
    • The Code is also embedded into various aspects of Council’s corporate values. The Council’s values are continually referred to in the way Council approaches its work and its dealings with the community.
    • The Code is enforced by all people leaders at Council and any staff member who does not abide by this policy is promptly and respectfully reminded of their obligations.
    • Depending on the severity of the breach the matter may be referred to Human Resources and an investigation may occur. Any substantiated breaches of the Code may result in disciplinary action and this may also involve termination of employment. All employees are provided procedural fairness through any such formal process.
    • Every three years, employees are required to undertake a refresher e-learning training session in the Code.

Regarding the management of procurement, any officer who participates in the assessment of a tender or purchasing process is required to firstly complete a written confirmation that they have no conflicts or potential conflicts of interest with any of the tendering parties. The processes are as follows:

(i) Prior to a Pre-Tender Meeting, all staff involved in the process (i.e. panel members) must firstly complete a Confidentiality Declaration Form. The panel is not permitted to have any knowledge of the contents of the specifications, budgetary figures or any other information deemed to be confidential until completion of the Declarations.

ii) When tender submissions are received on the tender closing date, the relevant Procurement Officer (Facilitator of the tender panel) generates a Code of Conduct document which must be read and a Conflict of Interest form which must be signed off, by each panel member including the Procurement Officer. Subject to signing of the Conflict of Interest form, the Tender Panel members are then given access to the tender submissions which are located in the Official Content Manager System.

Council reviews and updates its procurement policy annually. The 2021 review will include a focus on ensuring full compliance with the requirements of Local Government Act 2020. Council will be adopting a new fully updated Procurement Policy by the end of the 2021 calendar year. This work is underway and utilises Local Government Victoria resources, including their best practice guidelines and the preface to those guidelines.

Sub-contracting arrangements

With regard to procurement processes, there are several points at which Council must be notified of any potential conflicts of interest between a contractor and associated persons/organisations concerning the contract, separate from the ‘staff notification’ of a conflict of interest.

Sub-contractors are currently dealt with in the Tender Information and Conditions of Tender which specifically addresses the matter of identifying conflicts of interest which exist between the contractor and sub-contractors.

Tenderers are required to provide specific details as to how they intend to manage sub-contractors that are to be engaged in the works. Details must include the processes that will be put in place to ensure that the sub-contractors will align with all criteria required of the contractor including the Tenderers Quality, Environmental and Health and Safety Management Plans. If there appears to be any anomalies with the listed sub-contractors, the Tender Evaluation Panel would raise it either in a written query or at interview.

The AS2124-based contracts used for building projects require the written approval of sub-contractors by the Superintendent, where ‘approval shall not be unreasonably withheld’ (section 9.2). The Council is intending to incorporate a similar clause into its Procurement Policy requiring all contractors (in new contracts) to advise and obtain Council approval for any sub-contractor they use. This will assist the oversight of procurement procedures as referenced in the Conflict of Interest Policy.

The Council also has conflicts of interest clauses in its Conditions of Contract for Services, Consultancy Services and for ICT Consultancy Services to manage potential conflicts between contractors and sub-contractors.

 

IBAC publishes responses to our investigations to inform the community about actions agencies advise they are taking, and to share learnings that may help other agencies improve their systems and practices to prevent corruption and misconduct.

Operation Dorset

Allegation

In July 2015, IBAC received information concerning the suspected corrupt conduct of a project manager in Darebin City Council's capital works department.

In August 2015, IBAC commenced Operation Dorset to investigate allegations that the project manager had subverted procurement processes and failed to declare and manage conflicts of interest when engaging suppliers on behalf of the council. It was also alleged the project manager inappropriately disclosed information to ensure a former colleague's company was successful in obtaining road maintenance contracts with the council.

Outcome

IBAC could not substantiate the allegation that the project manager obtained or facilitated the obtaining of a financial advantage from his ex-colleague's company.

However IBAC's investigation established that the project manager played a key role in another company obtaining a large financial advantage (of more than $16 million in contracts between 2002 and 2016). That advantage was obtained in circumstances where the project manager was receiving cash, gifts and other benefits from that company.

The project manager resigned while under investigation.

Opportunities

Operation Dorset identified a number of opportunities for the council to strengthen its policies and practices in relation to procurement.

In July 2019 and September 2020, the Council wrote to IBAC outlining actions it had taken to address the corruption vulnerabilities identified in Operation Dorset.

The investigation was the subject of a special report to Parliament in September 2019.

View the Special report on corruption risks associated with procurement in local government and the Council's response to IBAC's recommendations

Operation Logan

Allegation

In December 2014, IBAC received a complaint alleging a Latrobe City Council employee was inflating the attendance records for an aged care community program. The program was used as the basis for funding from the Department of Health and Human Services. It was alleged this conduct amounted to obtaining a financial advantage by deception on behalf of the Council.

IBAC investigated allegations of:

  • False records entered or otherwise altered in the Council's community program database
  • Irregularities in the purchasing of foodstuffs and appliances that were designated for the program
  • Misuse of a corporate purchasing card and handling of petty cash.

Outcome

IBAC's investigation concluded that it was likely the Council employee deliberately overstated the services provided by the Council to obtain more than $900,000 in excess funding from the Department. It was also likely they used the community program's budget to obtain petty cash and groceries for personal use. However due to poor processes and systems, the lack of data quality assurance meant there was insufficient evidence for IBAC to proceed with a prosecution.

IBAC's investigation substantiated the allegation that the employee used Council funds to purchase several appliances for their personal use, and referred the matter to local police for prosecution. The employee was subsequently charged with three counts of theft. The matter was ultimately discharged on the basis that the accused had successfully completed a diversion plan.

Opportunities

IBAC identified a number of corruption vulnerabilities relating to internal reporting, purchasing procedures, asset management, cash handling and information security that contributed to this conduct continuing undetected by the Council for a number of years.

In March 2017, Latrobe Council provided a response to IBAC, outlining the key actions it had taken to address the corruption vulnerabilities identified in Operation Logan. These actions include:

  • revising and strengthening its procurement policy
  • developingtraining related to procurement policies and procedures
  • reviewing procedures for purchasing cards and petty cash handling
  • conducting a review of assets
  • developing an independent record keeping system designed to identify and investigate irregularities
  • strengthening information security processes and risk assessments
  • strengthening protected disclosure procedures and Code of Conduct.

IBAC publishes responses to our investigations to inform the community about actions agencies advise they are taking, and to share learnings that may help other agencies improve their systems and practices to prevent corruption and misconduct.

The Council’s response is as follows:

Procurement procedures including purchase orders are raised prior to the issue of invoices, that the practice of using gift cards is reviewed, that expenditure on corporate cards is reconciled and that procurement decisions made by coordinators and managers are subject to appropriate oversight

An audit identified that a lack of oversight in purchasing and procurement allowed purchase orders to be raised after invoices were issued and a corporate credit card to be used to purchase supermarket gift cards for use by staff, without reconciliation of expenditure.

Council endorsed a revised Procurement Policy in September 2016 and the CEO endorsed an updated Procurement Operational Policy. All officers must comply with these documents when undertaking a procurement activity.    

All requisitions are audited by the Procurement team, any non- compliance is registered on Council's non-compliance register and reported accordingly to the Executive team. The Procurement team also reports on purchase orders raised after an invoice is received. This report has been presented to Council's Executive team with the non-compliance register.

In addition, the Procurement team finalised a Procurement Fundamentals e-Learning platform. This training provides officers with the required training to undertake procurement activities on behalf of Council. The training is with the Learning & Development team for implementation. Additionally updates have been made to the requisition screen to enhance useability and to allow improved reporting access and compliance.

Link to ensuring purchase orders are being raised prior to standard reports have been developed around a range of procurement matters that are being produced for the Executive Team to review including tracking of purchase orders non-compliant and trending data.

A revised Purchasing Card Operational Policy has been developed and a process is in place that requires the approval of a General Manager before gift vouchers are purchased. The purchase of gift vouchers is still a requirement across the organisation and is often used for service awards. All individual purchase card statements are authorised by the next level of management and are collated and reconciled by the Finance Team where any compliance issues are identified and reported to the audit committee.

Petty cash handling

Petty cash handling protocols have changed significantly and the need for staff to handle cash has been reduced. However, it is important to ensure those changes are enforced and that cash handling procedures are monitored periodically to check for changes in practices.

Accounting Services to review petty cash procedures to ensure they adequately cover cash handling requirements. All petty cash custodians to be issued with the revised procedures.

Asset management

A minor asset review was undertaken by the Finance Department in early 2016. The outcomes of the review identified there are two key areas within Council that have a higher volume of minor assets, these being IT and the Depot. It was also identified that both of these areas have current systems in place to record minor assets including a barcode/numbering system which enables identification and tracking of the assets and it was recommended that this be maintained. It was also recognised that the cost to maintain other asset registers and asset markings across the organisation for low value portable assets far outweighed the likely losses, concluding that the implementation of formal identification and marking of these assets was not recommended.

The outcomes of the review identified the need to develop a Minor Assets Operational Policy which will recommend the requirement that the costing of all minor assets purchased to one natural account to make it easier to identify purchased items and to undertake spot checks. Training has been implemented for the procurement team to identify asset purchases and to check that the correct allocation codes have been used, and a missing items register has been created to monitor possible losses for patterns and to identify the financial value.

Draft Minor Assets Operational Policy has been developed and is being reviewed by the Coordinator Accounting Services.

Record keeping

An audit identified that accurate record keeping practices and procedures could have allowed Council to detect irregularities in a timely manner.

An independent system has been implemented that will identify and investigate any irregularities. Whole-of-Department monthly reports are run and monitored by a Systems Officer, who is independent of the Direct Care Team (service delivery).

Information security

An audit identified sharing of passwords obviously compromises Council’s systems and the security and confidentiality of Council records.

In October 2016, Security Risk Assessment work was completed. Expecting to complete policy and procedures reviews and updates during November into December for endorsement by the Executive team. This will then enable the release to all existing staff via communications in January/February reminding people of their user obligations and getting all computer users to formally acknowledge that obligation. This will be accompanied by a full communication plan focusing on good security practice.

The card security components will be integrated with the staff termination process.

In February 2017, the action regarding password sharing is still outstanding. IT has a communications plan developed that will address a number of security risk elements including password sharing. A new security policy is being finalised following the recent Penetration Test which we aim to release before 31 March with a supporting communications campaign that will remind staff of their security obligations.

In February 2017, procedures relating to the issuing, tracking and recording of primary and temporary cards and their use, have been updated to address identified deficiencies and risks. The procedures will be tested quarterly to ensure officer compliance.

Will ramp up communication to address the password issue, highlighting obligation and risks staff present by breaching Policy.

Culture at Council

Organisational changes underway will provide staff with a better understand of complaint procedures, confident in the new management at Council, and willingness to report directly to more senior managers.

The Protected Disclosure Procedure was reviewed and approved by Council’s Executive team in July 2016. The updated procedure has been uploaded onto Council's website and intranet and promoted at the Senior Leader Team meeting to encourage sharing with their teams.

Contact details for the Protected Disclosure Coordinator have been updated on Council's website and intranet to reflect staff changes.

All staff that completed Fraud Training prior to October 2015 have been requested to complete the Fraud, Corruption & Protected Disclosure Awareness Training.

Protected Disclosure is also addressed as part of the Corporate Induction which is compulsory for all new staff.

A review of Latrobe's existing Code of Conduct was undertaken in the first quarter of 2016. The purpose of the review was to ensure the code was reflecting legislative requirements and was in a format that was easy to understand and comply with.

After a thorough consultation process, the code was approved by the Executive in May 2016 and published.

Latrobe's new values (accountable, trustworthy, collaborative, innovative) were launched by the Executive to the entire organisation in June 2016. The new code makes clear the organisation's expectation that employees must adhere to the new values. Furthermore, the new values form part of the organisation's performance management framework. During the employee's appraisal, the employee is required to demonstrate (via examples) how they have demonstrated each of the organisational values throughout the period of assessment. This then forms the basis of a conversation between employee and supervisor and the supervisor will provide the employee a rating.

Audit and risk management

An audit identified that appropriate risk and management strategies were not in place.

The Council's Risk Management Policy and Operational Policy have been endorsed and are now active. A high level Strategic Risk has been established "Council experiences a fraud or corruption event" and is currently rated as significant as assessed by the Executive Team, in accordance with Council's risk rating matrix.

In addition, each operational Business Unit will be developing an operational risk “ … Unit experiences a fraud or corruption event'”. These are being progressively established.

The fraud control plan and fraud policy will be presented to Council in March 2017 for adoption.

People and Culture are currently undertaking the business unit level risk assessment process. This will inform our fraud/corruption risks within the organisation.

Operation Lockhart

Allegation

In August 2018, IBAC commenced an investigation into allegations that a former Murrindindi Shire Council employee engaged in corrupt conduct by using their position to purchase goods for the Council from their private company. It was alleged the employee engaged in deceptive conduct to ensure the purchase of goods appeared legitimate. The alleged conduct occurred while the Council was engaged in disaster recovery in the aftermath of the 2009 Black Saturday bushfires.

Outcome

IBAC did not substantiate the allegations relating to the employee purchasing goods from their private company. However IBAC found the employee failed to declare conflicts of interest when using their position to contract work to entities associated with a relative and associate.

Opportunities

IBAC identified opportunities for the Murrindindi Shire Council to strengthen its policies, procedures and practices to address the corruption vulnerabilities identified in this investigation.

These included reviewing policies, procedures and practices in relation to disaster recovery and conflicts of interest, and to ensure employees understand their obligations.

In August 2020, the Council provided a response to IBAC, outlining actions it had taken to address the vulnerabilities identified in Operation Lockhart.  

The Council's response outlined the organisational and policy changes that were in progress at the time of the investigation, and those that have been subsequently implemented.

IBAC publishes responses to our investigations to inform the community about actions agencies advise they are taking, and to share learnings that may help other agencies improve their systems and practices to prevent corruption and misconduct.

Murrindindi Shire Council's response is as follows:

Organisational Restructure

A restructure of the Corporate Services Directorate was undertaken during late 2018 and early 2019 to separate the Directorate’s corporate operations and service delivery functions (under a new Business Services Department) from the corporate risk management and governance oversight functions (under a new Governance and Risk Department).

This separation was aimed at strengthening policy controls, compliance oversight and reporting in relation to key corporate and organisational practices, including those specifically highlighted by Operation Lockhart; namely procurement and contract management, human resource management (including recruitment screening), emergency management, and fraud and corruption prevention.

As part of this restructure a new Integrity and Governance Coordinator position was created. This position reports to the Manager Governance and Risk and has key responsibilities to support the embedding of appropriate governance and integrity practices into corporate processes, including monitoring compliance.

Fraud Prevention and Disclosures of Interest

Following the creation of the Governance and Risk Department and the appointment of the Integrity and Governance Coordinator, the Council has prioritised several initiatives to address the corruption vulnerabilities raised in Operation Lockhart including:

  • Establishment of a new organisational fraud and corruption control framework, incorporating the following elements:
    • Preparation of a new Fraud and Corruption Control Policy, which was formally adopted by Council in December 2019, with responsibilities and accountabilities for fraud prevention established across all levels of the organisation
    • Fraud and corruption awareness training has been undertaken for all employees across the organisation
    • A fraud incident register has been established to capture and monitor instances of suspected fraud and corruption across the organisation
    • Fraud risk assessment training, including actual fraud risk assessments, have been conducted across several areas of Council’s operations in priority of fraud risk; this work is ongoing
    • Self-assessment of Council’s fraud control environment against the findings of the Victorian Auditor General’s Office 2019 investigation into Fraud Prevention and Control in Local Government
    • Council’s Public Interest Disclosure Policy and associated procedures have been reviewed and updated, with Council adopting a revised policy in January 2020
    • Council adopted a revised Audit and Risk Committee Charter in August 2020 to include a heightened focus for the Committee on monitoring and evaluating Council’s fraud control framework.
  • Full review and rewrite of Council’s Employee Code of Conduct, with a renewed emphasis on employee obligations to disclose real or potential conflicts of interest, particularly in relation to procurement, recruitment, additional employment and the disclosure of related party and private business interests. The Code was adopted by Council’s Executive in July 2020 and employee training on the Code is scheduled to occur in September and October this year.
  • Development of a new Related Party Disclosure Policy and associated procedures adopted by Council’s Executive in June 2019 including:
    • Regular and more exact capture of related party relationships with Council’s key management personnel
    • Requirement for key management personnel to disclosure related party transactions with Council
    • Data analytics to identify or confirm the existence of financial transactions (other than payroll) between key management personnel (or their related parties) and Council.
  • Development of a new Gifts and Hospitality Policy which was adopted by Council’s Executive in June 2020. Whilst not specifically raised in the Operation Lockhart, the Council recognised that the inappropriate acceptance of gifts and hospitality by Council employees could lead to corrupt employee conduct and was therefore considered a corruption risk or vulnerability. Staff training on this policy will occur as part of the Code of Conduct training.

Emergency and Disaster Management and Business Continuity

The Council’s Business Continuity Plan provides for the oversight of business recovery actions by a business impact assessment team. The team comprises Council’s management and executive teams, including the Manager Governance and Risk. All operational decisions during business interruption, including those relating to the functions highlighted by Operation Lockhart (eg. procurement and temporary staff recruitment or deployment) are made or overseen by this team, thereby reducing the risk of poor oversight, and inappropriate or possible corrupt practices during a crisis.

This has been demonstrated recently with the current COVID-19 pandemic which triggered Council’s business continuity arrangements. A Business Impact Assessment Team chaired by the CEO meets three times a week to review the status of the pandemic and the organisation’s response and recovery efforts. The team makes or reviews all decisions on staffing and operational matters, ensuring appropriate governance oversight and compliance with Council’s Policy framework.

In order to strengthen governance oversight during significant emergencies and disasters, and in response to Operational Lockhart, the Council has combined the functions of emergency (and disaster) preparedness planning and business continuity planning under a single coordination role.

In the event of a major external disaster, the business continuity arrangements will be enacted (irrespective of whether business has been interrupted by the event) and will operate alongside the Council’s municipal emergency management arrangements, to provide executive and management oversight of organisational responses to the emergency.

Procurement and Recruitment Practices

The Council has reviewed its Procurement Policy and associated guidelines several times following Operation Lockhart. The most recent policy review was adopted by Council in May 2020.  The adopted policy is consistent with best practice guidelines issued by Victorian State Government and provides a number of controls at various procurement value thresholds to minimise the risk of fraud and corruption in the procurement process. These controls include:

  • Requirement for conflict of interest declarations from all participants in the procurement decision making process
  • Independent approval of the procurement methodology, prior to the procurement commencement
  • Independent approval of the procurement evaluation prior to the awarding of the procurement arrangement
  • For complex procurements, the appointment of a probity advisor to oversee the conduct of the procurement process
  • Exemptions from procurement threshold arrangements or controls requiring approval at minimum Director level.

Compliance with Council’s procurement process is monitored by a Procurement Officer within the Governance and Risk Department with quarterly compliance reporting to the Executive and Management teams.

The Council has also developed a new Employee Recruitment, Screening and Induction Policy to address the potential corruption vulnerabilities associated with recruitment and screening processes highlighted by Operation Lockhart. The policy was developed and signed off by Council’s Executive Team in June 2020. The Policy has strengthened controls around pre-employment screening to safeguard Council against employing people based on false or fraudulent information, and to ensure integrity standards are met. This includes screening for the following purposes:

  • Validate Qualifications – sight and verify true copies
  • Validate Licences – vehicle and where required heavy licence
  • Validate work rights - supply passport ID/visa
  • Validate Work history – referee checks
  • Complete a security/police check – mandatory for all positions
  • Pre-employment medicals – guidelines to determine where required
  • Working With Children Check – mandatory for certain roles
  • Test for computer literacy/skill level – for administrative roles

The Policy also reinforces the requirements for the disclosure of conflict of interest by all participants in the recruitment and selection process. The Council’s management team has been briefed on the requirements of the policy. The Council’s Human Resource Coordinator facilitates compliance with this Policy across the management team.

Operation Charnley

Allegation

A complaint was made that a councillor was accepting bribes in the form of purported gifts in exchange for awarding community grants to a prominent local businessman. Due to the seriousness of the allegations, IBAC decided to investigate. As part of Operation Charnley, IBAC interviewed relevant witnesses and reviewed the council’s conflict of interest and councillor code of conduct policies, and their community grants procedure. 

Outcome

While the allegation could not be substantiated, IBAC identified concerns regarding the conduct of individuals in public office, as well as broader issues which caused the council to be vulnerable to corruption, including: 

  • conflicts of interest not being reported and a lack of knowledge about when a conflict of interest or perceived conflict of interest exists
  • behaviours inconsistent with the councillor code of conduct. 

IBAC recommended the Minister for Local Government consider providing the council with advice that it thoroughly review its policies, procedures and training in the following areas to ensure that the vulnerabilities identified in IBAC’s Operation Charnley have been addressed, and that councillors fully understand their obligations in relation to:

  • councillor code of conduct
  • conflict of interest
  • gifts benefits and hospitality

IBAC requested that the Minister provide a report to IBAC on the aforementioned recommendations within six months stating:

  • whether or not they have taken action as recommended by IBAC
  • if they have not taken action or do not intend to take the recommended action, the reason for not taking or intending to take the action.

In December 2016, the council CEO provided a response to the Minister for Local Government, with key actions the council is taking summarised as follows:

Conflict of interest

The municipal council engaged an external provider to conduct a comprehensive introduction to the requirements of the Local Government Act 1989, with particular emphasis on conflicts of interest provisions. All councillors were reminded of their obligations under the legislation and the importance of recognising both potential and perceived conflicts. Following this half day session, an additional session was conducted to provide a further opportunity for councillors who may have missed the first session or felt that they required further information or wished to discuss personal circumstances in greater depth. All councillors were encouraged to attend at least one of the sessions, with a number of councillors taking the opportunity to attend both.

The importance of recognising and declaring all forms of conflict of interest has been further enhanced for this term of council with the introduction of a Conflict of Interest Declaration. This Declaration is required to be filled in by each councillor and signed at every Assembly of Council to keep a record of council attendance for each individual briefing and whether any conflicts have been recorded and resolved accordingly. This Declaration prompts all councillors to consider any potential conflicts on a weekly basis while also enabling the organisation to maintain records of attendance and whether any conflicts have been declared. 

Gifts, benefits and hospitality

The organisation’s councillor code of conduct requires any gift (including benefit or hospitality) valued at over $20 to be declared and registered with the organisation. The legislative requirements relating to gifts and benefits were further reinforced during the training conducted by the provider in 2016.
In 2016 the council conducted a workshop to commence the review of the councillor code of conduct. A key component of this review was discussion around how not only gifts, benefits and hospitality must be handled, but also the importance of declaring any offers of gifts, benefits and hospitality to ensure full transparency.

The importance of these requirements will continue to be reinforced as council continues their review of the code of conduct.

Behaviour of persons in a position of public office

In both the training sessions held in 2016, emphasis was placed on what it means to be a councillor in terms of requirements of public office as defined under the Local Government Act 1989. Areas of focus included councillor and staff interaction protocols, community expectations of the role, and the need to act with integrity at all times.

The councillor code of conduct review workshop held in 2016 provided further opportunities to explore what this means in the municipal context and councillors were required to read and provide input into each individual section of the code. Further workshops will be held ahead of the endorsement of the revised code.

In addition to the work outlined above, the importance of the code of conduct principles will be further reinforced at a council planning workshop in 2017. This workshop will provide opportunity to emphasise the role of councillor and the expectations and requirements demanded by not only the Local Government Act 1989, but the broader community.

Annual refresher training in the areas previously identified will also be held for councillors throughout the duration of their term. These sessions will also provide opportunity for further reinforcement of code of conduct principles.

IBAC publishes responses to our recommendations in order to inform the community about actions agencies advise they are taking, and to share learnings that may help other agencies improve their systems and practices.


Operation Blackwood

Allegation

In August 2013, IBAC received a complaint principally alleging interference in the sale of St Brigid’s Church in Crossley by a Moyne Shire Councillor.

It was alleged the councillor interfered with the private tender process of the sale with the intent to assist a community group to purchase the property at a reduced price.

A particular concern for IBAC was an allegation that the Councillor had falsely told the unsuccessful higher tenderer that the Council would not issue works permits or allow development of the property. This allegedly facilitated a financial advantage for the community group, being a $150,000 reduction in the sale price of St Brigid’s Church.

Outcome

IBAC’s investigation led it to conclude that the complaint was unfounded.

Operation Clarence

Allegation

On receiving a notification from the Local Government Investigations and Compliance Inspectorate (LGICI), we investigated allegations that a Councillor received bribes to support planning proposals.

Operation Clarence examined whether $60,000 had changed hands over one commercial development, and whether the Councillor was continuing to solicit and accept bribes for other development applications.

Outcome

After a thorough investigation, the specific allegation of bribery was unsubstantiated. Nor did the investigation find the Councillor was receiving ongoing bribes. The investigation was closed with no further action.

Operation Continent

Allegation

In early 2013, Mitchell Shire Council notified IBAC of allegations of corrupt conduct by council employees at the Broadford Works Depot. The allegations investigated by IBAC included:
• a corrupt business relationship between a council employee and an external contractor
• unauthorised work by council employees, using council materials, in return for cash payments
• invoicing of the council for work not undertaken and improper use of council staff and property by an external contractor
• theft of council equipment and property, including fuel, tools and vehicle parts, by council employees
• fraudulent purchasing of goods by council employees.

Outcome

The IBAC investigation confirmed fraudulent purchasing but did not substantiate the other allegations. However, the investigation did reveal a number of issues in the conduct, management and supervision of the depot, including poor record keeping, a lack of registers for manage physical assets, inadequate controls such as regular audits and effective separation of duties and inappropriate relationships with external contractors.
 
Following the investigation, IBAC reviewed whether the issues in the investigation existed more broadly across the local government sector, releasing the Review of council works depots report in May 2015.

Operation Eden

Allegations

In September 2018, IBAC commenced Operation Eden to investigate if public officers, including councillors, at Wodonga City Council were showing favouritism to developers involved in commercial developments in the municipality in return for benefits. The investigation also explored whether any developers had adversely affected the performance of any public officers in the performance of their duties.

Outcome

IBAC's investigation did not substantiate any allegation of corrupt conduct by councillors. Likewise, the investigation did not establish any instances of favouritism being afforded to specific developers by public officers.

However, IBAC's investigation did establish that a senior employee of the Council failed to adequately manage a conflict of interest when they engaged a consultant for several years. The consultant was a friend of the senior employee. The senior employee disagreed the relationship with the consultant gave rise to a conflict of interest; however IBAC considered the initial and continuing engagement of this consultant did not comply with the Council’s policies and guidelines around procurement, recruitment, and the staff code of conduct.

Additionally, it appears this non-compliance was not identified in any audits or reviews of the Council’s procurement during the period the consultant was engaged.

Opportunities

Operation Eden identified a number of opportunities for Wodonga City Council to strengthen its training and communications to ensure that all staff understand their obligations and are supported to report suspected misconduct and corruption, and that procurement is subject to regular audits to verify compliance.

In September and November 2020, Wodonga City Council wrote to IBAC outlining the actions it had taken to address the corruption vulnerabilities identified in Operation Eden.

The Council's response outlined changes which were implemented in 2017, prior to the investigation, and those which have been subsequently implemented.

IBAC publishes responses to our investigations to inform the community about actions agencies advise they are taking, and to share learnings that may help other agencies improve their systems and practices to prevent corruption and misconduct.

Wodonga City Council's response is as follows:

Actions to ensure all staff understand their obligations including in relation to the Staff Code of Conduct, procurement and conflicts of interest

In 2017, the Council implemented online compliance training to ensure all staff understand the range of obligations that apply to them. The on-line component supplements the in-person induction training undertaken by all staff and other training that may be undertaken by individual staff and which is specific to their professional skills and the requirements of council.

The online compliance training is mandatory for all staff and is to be completed every two years. The modules include key governance policies and integrity protocols, ranging from conflict of interest to procurement to public interest disclosures and fraud prevention. Staff without computer access complete the training in hard copy.  

The online compliance training will be supplemented every other year by in-person training.

All new staff complete the conflict of interest module at the commencement of their employment. The module is updated to ensure it addresses any changes in the law and industry expectations that take place from time to time. Conflict of interest obligations are also expressly addressed in each employee’s letter of offer of employment.

Staff are required to confirm that they have read and agree to abide by the Staff Code of Conduct upon commencement with the Council and again every 12 months as a part of annual performance reviews. The Code of Conduct is revised every year to address changes in the law and industry standards. This process is audited and followed through to ensure a signed confirmation has been received.

Council has a range of policy and procedures available to all staff to reference on its intranet site, covering topics including procurement, conflict of interest, fraud prevention and control, and gifts benefits and hospitality. Electronic approval systems are in place for procurement that includes procurement thresholds, delegations required, specified limits and supporting documentation. All exemptions can only be approved by the CEO and requires extensive and detailed rationale. The procurement policy and processes are discussed with every new employee during the mandatory induction session.

Training and communication about obligations to report suspected misconduct and corruption, and which external agencies can receive such reports

When Council in 2017 implemented online compliance training for all staff, it required all staff to complete a module on (then) protected disclosures (PDs). The module explained what PDs are, staff members’ obligations to report, and the range of ways to report suspected corrupt or improper conduct both within Council and externally. Since then all new staff complete this module at the time of the commencement of their employment. The module is updated to ensure it addresses any changes in the law and industry expectations, and so now carries the title 'public interest disclosures'. Staff who do not have access to this module electronically receive the information in hard copy to read and sign the acknowledgment form.

A Public Interest Disclosure information is also publically available on Council's website.

Every quarter Council conducts "all staff forums" and these include presentations on key strategic and governance policies, such as fraud, gifts and hospitality, and conflict of interest. For example, the next all staff forum will include a video presentation on Public Interest Disclosures. The forums are video recorded and available for subsequent viewing for staff unable to participate on the day.

Staff noticeboards continue to be used to support the on-line messaging, and this is evidenced by new posters recently printed and distributed on the subject of Public Interest Disclosures.

Council annexes to every employment contract its Staff Code of Conduct, Fraud Prevention and Management Policy and its Public Interest Disclosure Procedures which the new employee must read and acknowledge they understand. These include detailed information about fraud and corruption and mechanisms through which reports can be made both within Council and externally, including the names and details of the agencies that can receive these reports.

The Staff Code of Conduct includes a strong focus on integrity in local government including sections on making good publicly accountable decisions, being bold and speaking up, corrupt conduct and how to make a public interest disclosure, fraud, compliance with policy and the law, conflict of interest, gifts, meals and entertainment, and appropriate use (and how to avoid misuse) of Council equipment, assets, intellectual property and services.

Strong complaint handling systems and processes, including in relation to public interest disclosures and breaches of Staff Code of Conduct and organisational policy and procedures

Council has complaint handling systems and processes for external complaints (Complaint Handling Policy), internal grievances (Issue Resolution Directive), public interest disclosures (Public Interest Disclosure Procedures) and staff misconduct (Discipline Directive). Each of these are well established at Council and have provided appropriate frameworks and support for the allocation of responsibility and process for the management and response to complaints and reports of wrongdoing that have arisen from time to time. This has included the enforcement of the Staff Code of Conduct and Council policy and procedures.

Additionally, Council has a staff complaints directive and procedures to manage staff complaints, grievances and problems effectively and efficiently in a coordinated and systematic manner. This directive addresses, but is not limited to, complaints/concerns relating to inappropriate staff behaviour, breaches of the staff code of conduct and the management and mismanagement of Council policies and procedures. This directive is centred on a strong culture where all staff members are encouraged to safely contribute to the reinforcing of reasonable behavioural expectations with the purpose of achieving and maintaining a respectful and ethical workplace culture.

Council is presently developing a Staff Complaints Framework which is expected to be finalised within the month and then issued to staff. This is an easy reference chart to enable staff to follow the correct channels to quickly take appropriate action on any complaint/workplace issue.

Ensuring procurement is subject to regular audits that verify compliance with procurement and conflict of interest policies

Council's internal auditors compared the recommendations in the September 2019 IBAC Special report on corruption risks associated with local government against their most recent procurement internal audit dated March 2018 and presented a summary of the gaps to the September 16, 2020 Audit and Risk Committee meeting. Due to the small number of gaps and the low risk associated with them, the Audit and Risk Committee’s recommendation was that a separate review was not warranted and to incorporate them into the next procurement review due within the next 2 years.

Council has nominated councillor and staff conflict of interest as an internal audit topic to be included in the next Internal Audit Plan which is currently in development for adoption in mid-2021.

Council has completed an 'Accounts Payable' internal audit, incorporating the use of data analysis, in the first half of 2020, with the report presented at the September 2020 Audit and Risk Committee meeting.

Council presented a scope for a 'Credit Card and Expense Reimbursement' internal audit to the September Audit and Risk Committee meeting which was endorsed. However, the timing of the review has been delayed to the 2021 year as Covid-19 related pressures have impacted the implementation of a new expense management system and roll-out of new credit cards that are to be included in the review.

Council always includes Procurement, Accounts Payable, Payroll and Credit cards and expense reimbursements as topics for internal audit in each internal audit plan, so they are reviewed at a minimum every 3-4 years.

Operation Fraser

Allegation

Following a Victoria Police investigation, IBAC received a notification from the Victoria Police Professional Standards Command (PSC) alleging a metropolitan city council employee had stolen council animal management equipment and given it to members of an outlaw motorcycle gang.

As the allegation was that activity had occurred in the past, Operation Fraser focused on whether the officer had current criminal associations and if so, whether he was using his council employment for their benefit.

Outcome

On all available evidence, IBAC found the employee did not have current associations with the outlaw motorcycle gang members or associates.

However, IBAC recommended the council conduct a review of the accountability of unsupervised staff, and consider improving:
• policies and procedures around the use and supervision of council vehicles
• how policy and procedures are communicated and implemented in the work place
• staff awareness of conflicts of interest and their obligations under council policies.

The council accepted IBAC’s recommendations.

Operation Royston

Allegation

In November 2015, IBAC received a protected disclosure notification containing allegations of serious corrupt conduct involving a former manager at the City of Ballarat Council. Operation Royston investigated allegations that the manager subverted procurement processes and failed to fully declare and manage conflicts of interest when engaging suppliers (including his spouse and associates) on behalf of the Council.

Outcome

IBAC's investigation established that between October 2013 and November 2015, the former manager unlawfully authorised payments by the Council totalling $184,123. Of this, he had a pecuniary interest in $55,885 paid to his wife and $128,238 paid to his associates. He also solicited and received secret commissions totalling $47,745.

The former manager pleaded guilty to obtaining financial advantage by deception, attempting to commit an indictable offence, and soliciting secret commissions. He was sentenced to three years’ imprisonment and ordered to repay $31,200. His wife pleaded guilty to obtaining a financial advantage by deception and attempting to commit an indictable offence. She was convicted and fined $3000 and ordered to repay $20,500.

Further charges were laid against two of the former manager’s associates:

  • One individual was accused of paying secret commissions to a council employee. This person pleaded guilty, was fined $8,000 and sentenced to 200 hours of community work.
  • A second associate pleaded guilty to paying secret commissions to a council employee. They were found guilty without conviction, and fined $15,000.

Opportunities

Operation Royston identified a number of opportunities for the City of Ballarat Council to strengthen its policies and practices in relation to procurement.

In August 2020, the Council wrote to IBAC outlining actions it had taken to address the identified corruption vulnerabilities.

The investigation was the subject of a special report to Parliament in September 2019.

View the Special report on corruption risks associated with procurement in local government and the Council’s response to IBAC's recommendations 

Operation Rubicon

Allegation

On 7 October 2013, we received a complaint concerning a regional shire council. It alleged an unnamed councillor had been assisting a building company to win council tenders.

Our investigation was unable to identify the unknown councillor said to be assisting the builders win tenders. Our investigation was unable to find any evidence of this specific allegation, however there was an occasion where a councillor and a director of the council had unsuccessfully attempted to use their positions to influence the outcomes of two tender processes in favour of the builders. The investigation was unable to find any direct evidence that link this allegation to those matters.

On 18 October 2013, we received a complaint about the same council concerning interference in two tender processes by a current and former councillor, with the intended beneficiary being the same builders as the previous allegation. 

The allegation was that a councillor used his position on 15 July 2013 in an attempt to influence the outcome of a tender process by arranging for distribution of an alternate evaluation paper in favour of a company of builders.

Outcome

Our investigation, through council minutes and interviews with key council personnel, identified that this event did in fact occur, however the council vote recommended that the original tender evaluation stood in favour of an alternative builder. The investigation failed to identify any serious corrupt conduct regarding this allegation.

It was also alleged a councillor used his position to assume the chair of a tender evaluation panel for a local project, and influence the outcome of the process to favour a company of builders. They directed a staff member involved in the process to produce a report recommending those builders contrary to council practice.

An internal investigation into this matter commenced which resulted in the councillor’s contract being terminated. The subject of the allegation has been appropriately investigated and resolved by Council. No further action was required.

The investigation results were provided to the Local Government Compliance Inspectorate for their further action/review.

Operation Severn

Allegation

On 17 April 2013 we received an allegation from the Victorian Ombudsman involving the awarding of contracts by a city council. It stated that the project was poorly managed, resulting in cost increases. The notifier also alleged that he was approached by a council officer soliciting a bribe. They stated that after refusing the bribe the council allegedly then stopped paying their invoices and the reason given was that the work was poor.

Outcome

Our enquiries showed that the contract in question had gone significantly over the estimated costs even allowing for variations. There was no evidence to suggest that bribes had been offered or accepted.

We contacted the notifier repeatedly seeking further information as to why the allegation was made but by this time the notifier had left the last stated address and did not respond to our calls and letters. The matter was closed pending further information from the notifier.

State government

Operation Andros

In August 2017, IBAC commenced Operation Andros to investigate allegations examined allegations of corrupt conduct against employees of Emergency Management Victoria (EMV) and its predecessor organisation, the Fire Services Commission (FSC), agencies of the then Department of Justice and Regulation (DJR).

These allegations related to improper procurement processes and failures to declare conflicts of interest.

The Department of Justice and Community Safety (DJCS) replaced the former DJR following machinery of government changes on 1 January 2019.

Outcome

IBAC's investigation did not identify any serious corrupt conduct or criminal offences by any EMV or FSC employee.

However the investigation did identify organisational issues at EMV regarding:

  • the failure to declare or effectively manage conflicts of interest
  • poor procurement and contract management practices
  • risks associated with record keeping
  • a culture within FSC and EMV where the nature of the emergency management environment was used as a justification to bypass established policies and processes
  • a dual reporting structure that contributed to a lack of clarity around processes, particularly in relation to procurement.

Opportunities

IBAC identified opportunities for DJCS and EMV to address vulnerabilities identified in Operation Andros, including in relation to EMV’s conflict of interest framework, procurement and contract management, and EMV’s dual reporting structure.

In February 2021 DJCS wrote to IBAC outlining the actions it had taken to address the corruption vulnerabilities identified in Operation Andros.

IBAC publishes responses to our investigations to inform the community about actions agencies advise they are taking, and to share learnings that may help other agencies improve their systems and practices to prevent corruption and misconduct.

DJCS's response is as follows:

Emergency Management Victoria (EMV) to review and evaluate its conflict of interest framework, including regular audits to identify the completeness and accuracy of disclosures and registers, and checks of whether documented management responses have been properly implemented.

Policy framework and workplace culture

EMV applies the DJCS Conflict of Interest (COI) Policy, which is aligned to the Victorian Public Sector Commission's Guide to applying COI policy principles.

DJCS notes that the COI Policy was in place at the time of the conduct addressed in Operation Andros. However, while this policy and appropriate processes were in place, EMV has since increased its focus on raising awareness and compliance with this policy. As noted in IBAC’s findings, the nature of the emergency management portfolio meant that a sense of urgency could be used to bypass appropriate processes and accountability. Since this time, EMV has undergone significant reform in terms of governance, processes, and cultural change. The appropriate safeguards are in place to ensure the conduct detailed in Operation Andros does not occur again.

Audits and implementation checks

EMV now conducts quarterly reviews of COI documentation for all executive staff. Previously no audits of this information were conducted. EMV also regularly provides information to executives and staff about COI. The manager or supervisor of a staff member registering a COI approves the declaration. The COI Policy and processes apply to all EMV staff and contractors engaged.

EMV to ensure employees comply with its conflict of interest framework, including ensuring:

  • senior leaders, managers and supervisors understand their obligation to model strong integrity behaviours, including in relation to identifying and declaring conflicts of interest
  • senior leaders, managers and supervisors understand their obligation to actively and effectively manage the conflicts of interests of EMV employees and contractors
  • EMV employees and contractors understand their obligations to identify, declare and manage conflicts of interest including avoiding conflicts of interest where possible
  • declarations of conflicts of interest and any associated management plans are recorded, communicated to relevant supervisors, and reviewed as appropriate.

The overall culture of EMV has changed, which has had a significant impact in making it clear that undeclared conflicts or appropriate management of actual or perceived conflicts will not be tolerated.

Declaration and management of COI

EMV senior leaders, managers and supervisors are required to adhere to the DJCS COI Policy and broader Integrity Framework. This includes declaring COI, managing employee and contractor COI, and fostering an appropriate integrity culture.

COI declarations are completed by:

  • panel members on all procurement activities
  • panel members on all recruitment activities
  • as required and when circumstances change. For example, when an individual joins the Country Fire Authority (CFA) as a volunteer, starts a part-time job or has a partner who is employed in the same business unit.

In December 2020, the EMV Planning and Risk team engaged with the HR team, Business Service Coordinators, and other administrative teams regarding the completion of COI declarations. At the same time, the Planning and Risk team also engaged with managers involved in procurement activities to ensure that COI declarations are completed, and details captured on the COI Register.

Use of contractors

EMV complies with the broader DJCS and whole-of-government policy in relation to reducing the use of labour hire unless it meets the specified criteria and is approved by the Secretary. Therefore, there are additional checks and balances in place to ensure staff are not engaged as contractors after the cessation of their employment with EMV.

EMV COI education and engagement activities

On 23 December 2020, the Executive Director of Integrity and Reviews delivered a presentation to the EMV Executive Team on COI.

An all staff presentation by the Director of Integrity and Investigations regarding COI, integrity and fraud was planned for December 2020 and is now being rescheduled to an upcoming staff meeting in early-2021.

EMV is exploring opportunities for an education and information campaign regarding COI and outside employment or volunteer roles. This is planned to include direct communication messages to staff via email. Education would also be targeted at staff who are likely to be decision-makers, such as managers and executive staff.

Opportunities for broader EMV-wide information and communication campaigns promoting integrity in the workplace are also being considered.

Integrity Culture is also consulting with EMV about how to support any training and education opportunities.

EMV to address the corruption vulnerabilities identified in Operation Andros in relation to procurement and contract management, including ensuring:

  • EMV’s current procurement framework and controls are reviewed to identify any risks or inconsistencies with Departmental, whole of government and Victorian Government Purchasing Board policies
  • training for all employees involved in procurement, contract management and financial management effectively covers relevant policies and procedures including the Crisis Procurement Policy, conflict of interest procedures, code of conduct, and the responsibilities of financial delegates
  • robust information management processes are in place to accurately document all procurement activities in an auditable manner and employees understand their obligation to use the Department’s and EMV’s document management systems
  • audits and risk assessments are conducted to help identify system vulnerabilities that may not have been detected through regular monitoring processes
  • employees and suppliers are regularly reminded of their responsibility to report suspected corrupt conduct and how to make a report.

Meeting whole-of-government and DJCS standards

EMV has engaged several professional services and implemented the pre-approval process for these types of engagements (e.g. the Specialist Advisor for Fire Services Reform (FSR) and negotiation services engagement with key stakeholders for the FSR). Existing EMV procurement processes are guided by and are in line with whole-of-government and DJCS policies and standards. This includes (but is not limited to):

  • procurements over $100,000 being approved by the Procurement Approval Board (PAB)
  • appropriate probity processes
  • seeking the appropriate number of quotes for proposed procurement value
  • use of State Purchase Contracts
  • adhering to evaluation requirements
  • completing appropriate documentation
  • seeking appropriate approvals for each procurement.

Management and understanding of COI

COI declarations are now mandatory for all recruitment and procurement panel members, rather than being optional as they were under previous leadership.

There is no requirement for COI forms to be completed routinely as part of the contract management process. However, the obligations are clear that if there is any conflict, or even the potential for perceived conflict, then contract managers must complete the COI declaration. There is compliance with these requirements.

Crisis procurement

EMV have implemented policy and processes for crisis procurement activities whereby activities must directly relate to the crisis (rather than a long-term procurement project), and/or be an immediate need in response to the crisis.

Further to this, the procurement during/for a crisis does not exempt DJCS from its responsibility to manage public funds appropriately. Crisis procurement processes should be undertaken in accordance with the overriding good practice principles of:

  • value for money, accountability, and probity, to the extent that
  • they can be applied given the severity and urgency of the event
  • adopting minimum record-keeping processes
  • adhering to contract disclosure requirements
  • declaring conflicts of interests.

In relation to record-keeping, audit and reporting obligations, all staff utilising the Crisis Procurement Policy must:

  • obtain financial approval before commencing procurement activities related to this crisis with DJCS’ financial approval processes regarding financial delegation level approval still required for the cumulative contract
  • complete the DJCS Crisis Procurement Event Register.

In addition, staff are expected to:

  • complete COI plans and file in the department’s record management system (TRIM)
  • complete the Contract Disclosure Authority Form for contracts more than $100,000 (incl. GST) and provide it to the PAB Team via email
  • create the contract in the electronic contract management system and link/re-link purchase orders to contract
  • file all appropriate documents in TRIM to meet record keeping and audit requirements
  • re-visit the Crisis Procurement Event Register to ensure that any ongoing management activities are underway.

EMV complies with all the controls listed above.

Reviews and checks of procurement controls

A range of measures are designed to ensure appropriate governance, probity, compliance, and integrity measures including:

  • financial thresholds for sourcing and procurement approvals
  • sourcing requirements such as the extent of and process for approaching the market
  • probity planning, processes, and documentation requirement
  • COI declaration and management plans.

Audit and risk

EMV undertakes a separate process to update risks and treatments in addition to the quarterly group-level and critical business-unit level risk registers review and reporting.

EMV maintains a Strategic Risk Register.

EMV undertakes EMV-specific audits. One of the management-agreed actions from a Deloitte internal audit regarding systems and employees being compliant with the EMV Emergency Work Policy was that the Planning and Risk team undertake a periodic audit of the EMV timesheet approval process.

Record keeping

Procurement records are created and maintained at business level and stored in TRIM. EMV complies with the Records Management Policy, Standards and Procedures.

Reporting corrupt conduct and supplier contact

The Integrity Culture team is responsible for DJCS’ Speak Up policy and associated campaign encouraging leaders, staff, contractors and other parties to report any suspected corrupt conduct. DJCS also has a Supplier Code of Conduct, which staff are informed of in integrity communications.

This is part of DJCS’ broader integrity framework that applies to EMV.

Contracts with providers identified in Andros

EMV can confirm that it does not have any current contractual arrangements with the providers identified in Operation Andros.

EMV to review the corruption risks associated with its dual reporting structure identified in Operation Andros and advise IBAC how these risks have been addressed, including ensuring clarity of roles and consistent standards and processes are applied across the operational and the corporate areas of EMV.

Dual reporting and leadership change

EMV notes the corruption risks in the governance structure identified by IBAC. However, considerable reform, governance and culture change has occurred since this time in response to these risks. There have been no subsequent issues encountered in relation to role clarity between the Deputy Secretary/Chief Executive and the Emergency Management Commissioner (EMC).

Where significant decisions are required by the EMC, which have financial or HR impacts, even when this is during a crisis, those decisions are either discussed, referred, or agreed with the Chief Executive. Where it is important that the EMC has visibility of financial or HR matters, his office is briefed prior to final approval by the Chief Executive, Secretary or Minister.

Consistent standards and corporate processes

EMV executives are required to progress all procurement requests through the Director of Corporate Support and Transformation and the Deputy Secretary. This is in addition to complying with the wider DJCS policy on obtaining Secretarial approval on all procurement processes. The additional oversight has led to significant improvements as well as increased awareness and integrity within the new executive group.

In the last 18 months the following processes have been implemented:

  • Deputy Secretary and Secretary pre-approval required prior to the sourcing of professional services
  • Deputy Secretary and Secretary pre-approval prior to the sourcing of contractors/labour hire
  • change in the financial threshold of when a sourcing plan is required
  • implementation of a new system with Procurement Services to record upcoming procurement activities.

Operation Barron

Allegation

In April 2016, IBAC commenced an own motion investigation into allegations that a VicRoads employee engaged in serious corrupt conduct by accessing, altering and disclosing sensitive vehicle registration and licensing information without authorisation.

It was alleged the employee was disclosing this information to a family member who then shared it with associates from outlaw motorcycle gangs. IBAC commenced Operation Barron to identify the extent of this alleged offending.

Outcome

IBAC substantiated the allegations of unauthorised information access, alteration and disclosure, and identified more than 40 instances of this having occurred.

In March 2018, the VicRoads employee plead guilty to misconduct in public office, and was convicted and sentenced to a two-year Community Corrections Order.

Opportunities

Operation Barron identified a number of corruption vulnerabilities that enabled the employee to conceal their conduct at VicRoads. IBAC identified opportunities for VicRoads to strengthen its information security practices and auditing processes to address the corruption vulnerabilities identified in this investigation. These included:

  • review systems, policies and procedures in relation to auditing user access to registration and licensing systems, responsible use of VicRoads’ information (including recording reasons for accessing and altering reasons), and the role of managers and supervisors in supervising employees’ access to databases.
  • provide training and education to ensure all employees understand the requirements regarding the appropriate use, access and alteration of information across VicRoads platforms, and that supervisors and managers are trained regarding their obligations.

In January 2019, VicRoads provided a response to IBAC, outlining the key actions it had taken to address the corruption vulnerabilities identified in Operation Barron.

IBAC publishes responses to our investigations to inform the community about actions agencies advise they are taking, and to share learnings that may help other agencies improve their systems and practices to prevent corruption and misconduct.

VicRoads' response is as follows:

Auditing of user access to all registration and licensing systems including how supervisors monitor employee usage

VicRoads has taken a comprehensive approach to profiling its existing systems, policies and practices for user access in relation to all Registration & Licensing systems, including how supervisors monitor employee usage. VicRoads has undertaken several system and asset reengineering process improvements including:

  1. Developed and implemented a role-based access control framework for system users
  2. Established a review and control program for high-risk business transactions
  3. VicRoads’ 2019/20 Internal Audit Program includes a review of all role based access controls within Registration & Licencing systems and ongoing review of high-risk business transactions,
  4. Registration & Licencing core business systems continue to have a predefined set of exception reports which are distributed monthly to all supervising staff for review and action.

Victorian Protective Data Security Framework

VicRoads has received confirmation from the Office of the Victorian Information Commissioner that its Protective Data Security Plan (PDSP) complies with the Victorian Protective Data Security Framework, pursuant to Part 4 of the Privacy and Data Protection Act 2014.

VicRoads' PDSP contains a comprehensive and detailed hierarchy of planned information security uplift activities and access control strategies for implementation in 2019/2020.

Some of the corruption vulnerabilities identified in Operation Barron around information security access may be mitigated by measures VicRoads is progressing under its PDSP.

Responsible use of VicRoads information, including recording reasons for accessing and altering information in registration and licensing databases

VicRoads commissioned an assessment on the functionality and design standards required to strengthen staff accessing and/or altering information in Registration & Licensing databases.

VicRoads has received a proposed solution to address the recommendation, however, significant cost associated with implementing the solution and its overall value has led to VicRoads to exploring other alternatives.

In addition, VicRoads' PDSP security uplift program of works will strengthen the organisation’s personnel security framework across 2018/2019, supported by the development of operational policies and procedures to screen all current and potential employees, and provide ongoing assurance standards for handling of security clearances.

Other information security issues associated with VicRoads databases, including Lotus Notes databases

VicRoads is undertaking a program of work to improve the organisation’s knowledge and capabilities in target domains, and will implement solutions in business Quarter 1, 2019.

In addition, VicRoads' PDSP security uplift program of works includes a security risk profile assessment of the organisation’s critical information assets, including the development of treatment plans for implementation across 2018/19. Work will also commence on undertaking a security risk profile assessment of VicRoads' non-critical information assets post 2019.

The role of managers and supervisors in supervising employees' access to VicRoads databases to ensure access is for legitimate purposes and complies with VicRoads requirements

VicRoads has a zero-tolerance approach to incidents of fraud and corruption and is strengthening its Fraud Risk Management strategies and awareness programs across the organisation.

VicRoads has revised and updated its fraud risk assessment framework to enhance awareness of potential fraud exposure and treatment plans, including hierarchy of control standards at the manager and supervisory level that includes, legitimacy codes, access commands and a transaction review and control program across VicRoads databases.

IBAC also identified opportunities for VicRoads to provide training and education to employees to ensure:

All employees understand the requirements regarding the appropriate use, access and alteration of information across VicRoads systems, including registration and licensing information and Lotus Notes platforms

VicRoads maintains a comprehensive employee awareness and training framework underpinned by the Code of Conduct for Victorian Public Sector employees. The framework entails a confluence of specific training packages in 'Information Security Awareness' and 'Acceptable IT Use' for all VicRoads employees. The successful completion of training and support modules is monitored by VicRoads and exception reports are provided to line-management for resolution.

In addition, VicRoads provides training in 'Responsible IT Use' governed by policy, that clearly outlines VicRoads' protocols and standards for accessing core Registration & Licensing systems for all permanent and contract staff across the organisation.

Supervisors and managers responsible for monitoring other employees' access to VicRoads registration and licensing information are adequately trained regarding their accountabilities and associated systems, policies and procedures

VicRoads are supporting the Registration & Licensing leadership team to develop a targeted role-based training platform aimed at managers, team leaders and operational staff who perform supervisory functions. It is expected that the revised training framework and program of support services will add an explicit focus on communication, ownership and responsibility for actively finding opportunities to strengthen business operations. The program of work will be rolled-out to Registration & Licensing managers in early 2019.

In addition, VicRoads' PDSP security uplift program of work includes a dedicated security training and awareness strategy for 2018/2019, with planned implementation by 2019/2020.

IBAC asked VicRoads to advise of any management action in relation to inadequate supervision

VicRoads has discussed the findings of the Operation Barron report with the named supervisory staff. VicRoads advise that appropriate steps have been taken to support and enhance the employees' awareness, skills and approach to managing information security issues across the business.

Operation Bow

Allegation

In 2017, IBAC investigated allegations that a senior Worksafe inspector:

  • neglected to disclose a conflict of interest
  • failed to act appropriately in the course of his duties
  • failed to follow procedure to ensure a close associate avoided prosecution.

The inspector was contacted by a construction-related business informing him of a notifiable incident involving the fall of a worker. The inspector is a close associate of the person who runs that business but failed to adhere to Worksafe’s conflict of interest policy which required him to disclose the association. The inspector then attended the scene of the incident in his official capacity.

Outcome

IBAC substantiated the allegation of conflict of interest. The allegations that the Worksafe inspector failed to act appropriately and misused their position to ensure a close associate avoided prosecution have not been substantiated.

Operation Bow identified issues with WorkSafe policies, processes and practices, particularly in relation to identification and management of conflict of interest, and the actions of inspectors attending notifiable incidents (including the variation in the quality of reports prepared). IBAC made recommendations to address these corruption vulnerabilities.

Response to IBAC recommendations

Response from Worksafe Victoria to recommendations arising from Operation Bow

IBAC publishes responses to our investigations to inform the community about actions agencies advise they are taking, and to share learnings that may help other agencies improve their systems and practices to prevent corruption and misconduct.

Operation Carson

Allegation

IBAC received a notification from the then Department of Economic Development, Jobs, Transport and Resources (the Department) regarding allegations of an undeclared conflict of interest and misuse of position by an employee.

It was alleged an employee had engaged in serious corrupt conduct by improperly using their position to provide business opportunities for their partner. It was also alleged the former employee had an undeclared financial interest in their partner’s private business.

Outcome

IBAC substantiated allegations the employee provided preferential access and treatment to their partner. IBAC also established the employee and their partner were engaged in a private business that had not been declared to the Department. The employee sought to exploit the knowledge and networks they had developed through their public sector employment to further their business interests. The employee failed to declare their conflicts of interest and did not act in the public interest.

Opportunities

IBAC identified opportunities for the Department to ensure sound policies and procedures were in place in relation to conflicts of interest, gifts, benefits and hospitality, and information management and security, and to provide appropriate training to staff in those areas, as well as the Department's values and Code of Conduct for Victorian Public Sector Employees, and protected disclosure policy and procedures.

View the case study

In July 2018, the Department provided a response to IBAC, outlining the actions it had taken to address the corruption vulnerabilities identified in Operation Carson.

IBAC publishes responses to our investigations to inform the community about actions agencies advise they are taking, and to share learnings that may help other agencies improve their systems and practices to prevent corruption and misconduct.

The Department's response is as follows:

Over the past two years we have focussed on building and strengthening our integrity program. We are confident that we have sound integrity frameworks in place, particularly in the areas identified in your correspondence, namely gifts, benefits & hospitality, conflicts of interest and information management.

Notwithstanding this, we will continue to strengthen our training and awareness activities to ensure integrity information is flowing effectively through the organisation. To this end, among other activities, we will be introducing a mandated training program for all staff to embed awareness of our integrity polices and related matters throughout the department.

A key component of this training will be ensuring that our middle managers are equipped to identify and respond appropriately to red flags and integrity breaches. We will also be emphasising the support mechanisms available to assist middle managers, and the importance of vigilance and determination in pursuing and closing out any integrity concerns.

Finally, we will continue to explore opportunities at the program level to ensure there are complaint and feedback mechanisms appropriate to the stakeholder cohort for our discrete activities.

Operation Ettrick

Allegation

In December 2014, IBAC received a notification from Corrections Victoria containing allegations that corrections officers at Port Phillip Prison were trafficking illicit drugs into the prison, using illicit drugs, and maintaining links to organised crime entities.

In January 2015, IBAC commenced Operation Ettrick to investigate these allegations.

Outcome

IBAC found no evidence that corrections officers were engaged in trafficking drugs into Port Phillip Prison.

However, IBAC's investigation did establish:

  • at least two prison officers maintained associations with former prisoners, in contravention of prison policy and corrections standards
  • one prison officer attempted to use their position to influence the transfer of a current prisoner. This was a favour to a former prisoner with whom the prison officer had inappropriately maintained contact.

In addition to the inappropriate associations, IBAC identified one prison officer who was involved in the production and trafficking of illicit drugs (though not into the prison) and two other prison officers using illicit drugs. Two of the prison officers had worked together in the same unit for an extended period of time, with one holding a leadership role.

IBAC found that the inappropriate associations maintained by experienced officers modelled poor practices for others and may have undermined professional standards in the unit more broadly. There was also a poor understanding of declarable associations and conflicts of interest across the unit. This may have limited the capacity of colleagues to confidently identify wrongdoing in the unit.

As a result of IBAC's investigation, three corrections officers were dismissed in December 2015.

Opportunities

Operation Ettrick identified a number of opportunities for the then Department of Justice and Regulation to strengthen its policies and practices in areas such as declarable association, training on professional boundaries and conflict of interest, risk reduction regarding relationships between staff and prisoners, drug testing of corrections officers and the promotion of consistent policy standards.

In January 2017 and August 2020, the Department of Justice and Community Safety (DJCS) wrote to IBAC outlining actions it had taken to address the corruption vulnerabilities identified in Operation Ettrick.

IBAC publishes responses to our investigations to inform the community about actions agencies advise they are taking, and to share learnings that may help other agencies improve their systems and practices to prevent corruption and misconduct.

The Department's response is as follows:

Development and implementation of a more detailed policy regarding declarable associations between staff and relevant people such as former prisoners, prisoners' families and other person with known criminal histories.

Corrections Victoria transitioned its existing 'Corrections Conduct and Ethics Policy' to a Commissioner's Requirement, which requires compliance by both public and private prisons. The current Commissioner’s Requirement incorporates the following relevant legislative and departmental policy obligations:

  • Corrections Act 1986
  • Charter of Human Rights and Responsibilities Act 2006
  • Code of Conduct for Victorian Public Sector Employees (VPS Code of Conduct)
  • Department of Justice and Community Safety (DJCS) Declarable Associations Guideline and Related Policy
  • DJCS Security Screening Guidelines and Related Policy
  • DJCS Gifts and Hospitality Policy
  • DJCS Conflicts of Interest Policy
  • DJCS Safety Speak Up Guideline.

Development and delivery of regular training to staff on the importance of professional boundaries and staff obligations in regard to declarable associations and conflicts of interest.

DJCS has a Conflicts of Interest Policy and Framework that includes training and standard declaration forms. The Risk and Integrity Culture team facilitates training and engagement on integrity matters across DJCS, including in custodial settings. Professional boundaries training is also delivered to new recruits and has been incorporated into local and central orientation provided to contractors. Staff are also provided with regular examples of professional boundary issues, including a reminder in response to the COVID-19 pandemic.

Corrections Victoria to examine ways to reduce the risk of long term relationships developing between staff and prisoners, such as implementing a policy of maximum tenure for correctional officers in accommodation units.

DJCS has considered additional measures to reduce the risk of long-term relationships between staff and prisoners and concluded that it will not be introducing a specific policy for maximum tenure in accommodation units in relation to this finding.

Corrections staff regularly move between accommodation units and prisoners also frequently transition out of the custodial environment. This mitigates the risk of long-term relationships developing between staff and prisoners.

However, Corrections Victoria does have a staff rotation policy for high security and management units, which was introduced following the death of Carl Williams at Barwon Prison in 2010.

Consideration be given to the development and implementation of random and targeted drug testing of corrections officers and other persons with regular access to prisoners.

DJCS recognises that the use or introduction of illicit substances by prison staff is unacceptable and represents a potential corruption risk. This conduct is currently governed by various acts, regulations and Commissioner’s requirement including the Corrections Act, Corrections Regulations 2019, CR 1.4.8 Conduct and Ethics, CR 1.2.3 Strip Searches in Prisons, and the VPS Code of Conduct (Demonstrating Integrity including specifically 3.11 Drugs and Alcohol).

DJCS has determined that random testing will initially be introduced for high-risk roles, such as Security and Emergency Services Group, Emergency Services Group and General Duties staff who are licenced to access firearms, and that more broadly staff will be subject to targeted testing.

This recommendation will take some time to implement due to the impact of the COVID-19 pandemic on custodial settings. In August 2020, DJCS advised IBAC that the Corrections and Justice Services Group and People and Workplace Services area of DJCS are establishing a project team to lead this work.

Private prisons can already conduct drug testing of staff.

Corrections Victoria considers whether disciplinary or administrative action is appropriate in relation to the prison officer’s attempt to use their position to influence the transfer of a current prisoner.

DJCS noted that this would need to be acquitted by the private prison provider who employed the relevant officer. DJCS wrote to the private prison provider about this matter on 14 October 2016 and the private prison provider responded on 6 February 2017.

Following a review, the private prison provider found that while there were lessons to be learnt from the investigation to improve processes and procedures, it would not be taking any disciplinary action in relation to the prison officer.

On 13 February 2017, the (then) Commissioner of Corrections Victoria, wrote to the private prison provider stating that she was satisfied that the approach and conclusions made as part of their investigation were appropriate.

Corrections Victoria to work with private prison providers to promote consistent policy standards, particularly in relation to inappropriate associations, professional boundaries and conflicts of interest.

As outlined above, Corrections Victoria transitioned its existing 'Corrections Conduct and Ethics Policy' to a Commissioner's Requirement, which requires compliance by both public and private prisons. The Code of Conduct and other departmental policies also assist in managing inappropriate associations, professional boundaries and conflicts of interest.

Operation Franklin

Allegation

In November 2018, IBAC commenced an investigation into alleged corrupt conduct by an administrative employee of Victoria University (VU). It was alleged the employee used VU funds for the unauthorised purchase of EFTPOS-type gift cards.

Outcome

IBAC's investigation found the employee used university funds to obtain property by deception, namely EFTPOS gift cards, Coles Myer, Bunnings and iTunes gift cards, Cab charges, movie tickets and a mobile phone belonging to the University with a total value of over $650,000. 

The employee was prosecuted by the Office of Public Prosecutions following IBAC's investigation and was sentenced in March 2020 to three years and six months imprisonment after pleading guilty to offences of misconduct in public office and obtaining property by deception and theft.

Opportunities

Operation Franklin identified a number of corruption vulnerabilities that enabled the employee to conceal her corrupt conduct, including issues related to supervision and oversight, finance systems and processes and staff awareness of corruption vulnerabilities.

IBAC identified opportunities for VU to reduce the risk of fraud and corruption by reviewing and revising its policies, procedures and practices concerning procurement, financial performance management, as well as its corruption awareness training, complaints handling system, leadership and supervision.

In March 2020, VU provided an initial response to IBAC, outlining the key actions it had taken and would take to address the corruption vulnerabilities identified in Operation Franklin. In October 2020, VU provided an update to IBAC regarding further progress made.

IBAC publishes responses to our investigations to inform the community about actions agencies advise they are taking, and to share learnings that may help other agencies improve their systems and practices to prevent corruption and misconduct.

VU's response is as follows:

Procurement policies, systems and controls

The University has reviewed its fraud and corruption control framework, the Compliance and Audit Risk Committee has endorsed the new policy and procedure, and it will be formally enacted and implemented. The University is confident that this will create greater clarity and accountability.

The University’s Director of Procurement has implemented new processes for use of gift cards, purchasing, approval, recording and reporting their purchase use and disposal. Procurement operating work instructions have been refined to include additional fraud detection checklists. The Purchasing Policy is being reviewed to incorporate additional improvements from the Fraud and Risk Assessment Review and Cyber Security Audit.

Budget management and record keeping

The University’s Director of Strategic Financial Solutions has updated the Credit Card Policy to forbid the purchase of gift cards in support of the changes outlined above, implemented by the Director of Procurement.

The University has reviewed and implemented improvements for other forms of cash value cards, including phasing out of cab charges by June 2020.

Financial Code of Conduct and Financial Delegation policies are already accessible to staff, and the University is implementing finance training for new starters on their financial responsibilities, which will also be available for existing staff. The approach will ensure that new starters do not get access to finance systems or credit cards and are not awarded a financial delegation until training is undertaken. Modules are being developed for incorporation into compulsory online training.

Corruption awareness training and education

Following the University's own investigation into this matter, a training workshop has been conducted for senior staff to assist them in identifying and dealing with incidents of fraud, corruption and other improper conduct, together with advice as to how such conduct can be minimised. The materials developed from this workshop are being incorporated into an online training module which will be compulsory for all staff.

Complaints handling

The University has procedures and guidelines which are designed to assist staff in identifying rights and obligations under the Public Interest Disclosure Act 2012. Aside from this, the University's formal complaints handling system was, prior to Operation Franklin, primarily designed to address complaints against staff which were behavioural in nature (bullying, harassment etc). The University has now amended its Fraud and Corruption Control Procedure to make it clear to staff and to others dealing with the University that the complaints handling system relates to any form of complaint, including complaints of corruption or other improper conduct. If a member of the University community has a suspicion of fraud or corruption, they must make a report via their immediate supervisor or the University's Fraud and Corruption Control Officer.

Leadership and supervision arrangements, including reporting lines and accountability measures

While it is not uncommon for the University to share staffing resources between areas, in the situation investigated by IBAC the supervision arrangements were inadequate. The University has updated its Financial Code of Conduct Policy to specify that authentication credentials used to validate an individual’s identity, such as passwords, private keys or tokens, must not be shared or provided to any other person.

Purchase orders can only be approved by a financial delegate, through their own work email and/or finance system account. Executive Assistants are unable to approve purchase orders by having shared access to an Executive’s email account. Executives cannot delegate responsibility unless it adheres to what the University's systems and policies enable.

Management Financial Reports incorporate both budgeted and actual performance. The reports are very comprehensive and provide sufficient detail to identify line item purchases. They are provided through the University ERP system with ‘real time’ data availability. The primary issue raised in this instance has been the use by management of this financial information. Further financial training will be made available to managers to assist them in utilising this information. Monthly and quarterly financial reporting and analysis is also provided by the finance team to assist managers with their fiduciary duties.

A Fraud and Corruption Risk Audit was conducted in respect of the University's Financial Services Group by PricewaterhouseCoopers. The audit made, and the University accepted, five recommendations which related to:

  • Management of conflicts of interest
  • Ongoing identification, assessment and monitoring of fraud risks
  • Tracking of P2P compliance testing outcomes
  • System enhancements to improve audit trail and approvals
  • Enhanced training on fraud risks specific to procurement and finance.

The University has selected a fraud risk continuous monitoring solution that meets the University's requirements. Implementation is expected to start in late October 2020 and be operational by January 2021.

Operation Grey

Allegation

In June 2018, IBAC commenced Operation Grey to investigate allegations of false record keeping by senior staff within the Dispute Settlement Centre of Victoria (DSCV), an agency of the then Department of Justice and Regulation (the Department) in order to meet performance targets.

It was alleged that senior staff at DSCV improperly caused false reporting on a Victorian Government Budget Paper No. 3 (BP3) performance measure during the 2017-18 financial year. The performance measure related to the number of Dispute Resolution Advisory Services (DRAS) DSCV provides annually.

Outcome

IBAC's investigation confirmed that data had been modified but did not substantiate allegations of corrupt conduct in relation to those modifications, noting there was no evidence of undue pressure by senior managers to meet DSCV's BP3 targets or any wider culture of meeting performance measures at all costs.

However the investigation did identify organisational issues regarding the absence of written authorisation for data modification, a lack of separation of duties and poor management of case deletion scripts used to make bulk modifications to the database.

Opportunities

IBAC identified opportunities for the Department to address vulnerabilities identified in Operation Grey, including removal or restriction of access to the case deletion scripts, procedures to prevent further unauthorised modification and audits to assist with compliance.

In May 2020 and January 2021 the Department wrote to IBAC outlining the actions it had taken to address the corruption vulnerabilities identified in Operation Grey.

IBAC publishes responses to our investigations to inform the community about actions agencies advise they are taking, and to share learnings that may help other agencies improve their systems and practices to prevent corruption and misconduct.

The Department's response is as follows:

That the Department remove, or restrict access to, case deletion scripts on the agency’s servers

The editing of files was found by IBAC to be in response to a failure of officers to contemporaneously enter data as cases were active, thus leading to the need for back-capture and bulk data editing.

All cases are now being entered contemporaneously and monitored by managerial levels. There is no access to case deletion scripts by any DSCV employees (then or now). At the time of the incident, the case management system’s external provider was instructed to make these cases. The case management system was built by and is modified upon request by this external ICT provider.

The Department later acknowledged that 'some aspects of the letter of 22 May 2020 in relation to [this point] were incorrect', adding that, 'The deletion scripts were still on the server but were removed on 10 December 2020'.

Action to prevent further instances of unauthorised modifications to the DSCV and other performance reporting databases

The case management system is due to sunset at the end of the year. DSCV is merging with the Domestic Building Dispute Resolution Victoria (DBDRV) into one group. Dispute Services and DSCV will commence using the DBDRV system once modifications are built, which is currently underway. This system is managed by the Department's Technology Solutions and is used more broadly across the Department’s Regulation Group including Consumer Affairs Victoria.

Under the new DBDRV system, the layers of governance for modifications far exceed the one to one relationship between the then DSCV Operations Manager and the sole trader managing the previous case management system.

Any changes must be made through the local business unit and the Department's current operating procedures, which require a suitably authorised person at the manager level to make requests through Dispute Services ICT for progression to central departmental Technology Solutions. The DBDRV system also has customised access levels and a complete audit trail that cannot be deleted by Dispute Services staff, ICT or other users.

In the interim until the transition, DSCV has implemented a local policy that any changes to cases must be authorised by the Director by email.

The Department subsequently advised that:

  • The DSCV application that housed the previous case management system was decommissioned in October-November 2020
  • In December 2020, DJCS instructed CenITex to audit the file directory by examining the back- up tape. CenITex found that the deletion scripts have not been accessed by staff since February 2018.

Consideration of an audit of the DSCV case management system database

The Department has considered this recommendation but determined that there is a low risk of further fraudulent activity having occurred undetected. Given the way that the cases were created and the short duration of the issue, the extent of the incident is fully understood.

The current system will cease by the end of the year and additional data verification will be undertaken when the data is transferred to the new case management system. The data investigated relates to the counting of information and advice, which does not impose a risk to the service provided to the community.

Instead of a retrospective audit, the Department has since significantly expanded controls around verification of data reported which includes the documentation of a data dictionary for DSCV – which includes the measure, the counting rules, the approval process and authorisation of the data storage, and improved sign off protocols at the executive level.

The Department is seeking advice from its internal auditors on the possibility of extending planned controls audits to include some additional testing of the DSCV data.

Operation Tarlo

Allegation

In December 2017 and January 2018, IBAC received notifications from the Victorian Ombudsman and the (then) Department of Justice and Regulation regarding the conduct of a corrections officer employed at Fulham Correctional Centre.

The notifications outlined allegations that the officer had introduced contraband into the facility, had inappropriate relationships with prisoners, and had unlawfully accessed the Prisoner Information Management (PIM) system.

In January 2018, IBAC commenced Operation Tarlo to investigate these allegations.

Outcome

Shortly after IBAC commenced Operation Tarlo, the corrections officer resigned while under investigation. Partly in response to this resignation, IBAC discontinued its investigation.

Opportunities

IBAC identified a number of opportunities for the Department to strengthen its processes for identifying suspected corrupt conduct and ensuring allegations of suspected corrupt conduct are appropriately notified to IBAC. IBAC also sought clarification from the Department about an apparent delay in notifying IBAC of the correction officer’s suspected corrupt contact.

In November 2018, the Department wrote to IBAC outlining the following actions it had taken to address the corruption vulnerabilities identified in Operation Tarlo.

IBAC publishes responses to our investigations to inform the community about actions agencies advise they are taking, and to share learnings that may help other agencies improve their systems and practices to prevent corruption and misconduct.

The Department’s response is as follows:

Timely notification to IBAC of the correction officer's alleged corrupt conduct

Corrections Victoria received 30 information reports containing various allegations about the corrections officer. The information reports received during 2015 and 2016 did not provide sufficient evidence to allow the Department to form a reasonable suspicion that the corrections officer was engaged in any form of corrupt conduct during this period.

Both IBAC and Victoria Police were briefed on allegations concerning the corrections officer during 2017, before the decision to formally notify IBAC in January 2018.

Reviewing and strengthening the approach to identifying officers who are the subject of multiple Corrections Victoria Information Reports and ensuring IBAC is notified where these reports create a reasonable suspicion of suspected corrupt conduct

The Department continually reviews and strengthens its processes for referring allegations of suspected corrupt conduct to IBAC. Specific improvements actioned since these allegations were notified to IBAC in January 2018 include:

  • funding additional positions within Integrity and Investigations to support its fraud and corruption investigation and assessment activities
  • instituting weekly intelligence sharing meeting between relevant units
  • improving processes for referring information reports from the regions directly to Integrity and Investigations
  • instituting monthly intelligence sharing meetings with Victoria Police and IBAC
  • increased use of section 56 of the IBAC Act to share information with IBAC about potential corrupt conduct quickly as an additional avenue to notifying IBAC of suspected corrupt conduct under section 57 (1) of the IBAC Act
  • regular engagement between Integrity and Investigations and IBAC.

 

Operation Shannon

Allegation

 Operation Shannon concerned an IBAC investigation into allegations that former senior employees of Melbourne Polytechnic (MP) engaged in serious corrupt conduct in relation to a property leased to MP.

Outcome

IBAC's investigation did not substantiate the allegations of corruption.

However, in the course of the investigation, IBAC identified a number of corruption vulnerabilities. IBAC subsequently made recommendations to address these vulnerabilities, namely that MP review its policies, systems and practices in relation to procurement, conflict of interest, record keeping, information systems and private use of assets by employees, and associated education and training for staff.

In May 2017, MP provided a response to IBAC, outlining key actions MP is taking to address the corruption vulnerabilities identified in Operation Shannon. IBAC acknowledges that a number of those initiatives had already started prior to the commencement of IBAC’s investigation.

Operation Nepean

Allegations

In September 2014, IBAC commenced an investigation into allegations of corrupt conduct by Jeff Finlow, a former facilities manager at Dame Phyllis Frost Centre (DPFC).

In its investigation, IBAC examined allegations that Mr Finlow:

  • failed to comply with proper procurement processes and policies when awarding contracts to his son
  • failed to declare a conflict of interest
  • influenced the successful recruitment of another son, as a senior prison officer at DPFC in the facilities department.

Outcome

IBAC’s investigation found Mr Finlow subverted procurement processes to provide work to companies owned or operated by his son (and his son’s wife) to a value of $1.56 million. This included sharing competitors’ quotes, as well as failing to consistently obtain the required number of quotes for jobs, helping his son’s companies to submit cheaper quotes and win contracts.

Mr Finlow also used his position to influence the recruitment of another son at DPFC, despite his son not having the electrical qualifications required for the position.

Mr Finlow was stood down from his position while an internal investigation was conducted. He resigned in June 2015. After due consideration, IBAC decided there was insufficient evidence to charge Mr Finlow with criminal offences.

IBAC identified a number of corruption vulnerabilities at DPFC that helped facilitate Mr Finlow’s conduct. This included the failure of senior management to adequately oversight Mr Finlow or respond appropriately to his conflicts of interest. Recommendations were made by IBAC for DPFC to address these vulnerabilities.

IBAC also recommended Corrections Victoria (CV) review its policies and procedures to address the corruption vulnerabilities identified in Operation Nepean and take steps to ensure those vulnerabilities are addressed by other prison facilities under its control.

CV subsequently responded to the recommendations, including recommendations one and two on behalf of DPFC. CV advised that DPFC has made a number of changes to its procurement practices since the commencement of Operation Nepean. CV advised that it did not consider further action was required in relation to other prison facilities under its control, as procurement policies and procedures overseen by the Department of Justice and Regulation (DJR), have been assessed as adequate.

The investigation was the subject of a special report to State Parliament in April 2017.

View the Operation Nepean special report and responses to IBAC's recommendations

Operation Lansdowne

Note: Some Operation Lansdowne information and documents is currently unavailable.

Operation Liverpool

Allegation

In December 2014, IBAC commenced an own motion investigation into allegations of corrupt conduct by Adam Hardinge, a former construction manager at Bendigo Health. 

The investigation was expanded in May 2015 to include allegations concerning Bendigo Health’s Chief Executive Officer John Mulder.

IBAC investigated allegations that:

  • Mr Hardinge had engaged in corrupt conduct including collusion with Bendigo Health contractors for his personal benefit and the theft of property. 
  • Mr Mulder had used Bendigo Health employees to undertake works on two of his wife’s properties without payment and on Bendigo Health time, as well as corrupt conduct allegations that he had claimed living away from home allowance while living in properties owned by his wife.

Outcome

IBAC’s investigation found Mr Hardinge took Bendigo Health property and materials without proper authorisation, and circumvented the usual procurement controls in place at Bendigo Health for the benefit of himself and certain contractors. Mr Hardinge was charged and subsequently pleaded guilty to seven charges of theft, one charge of obtaining property by deception, and one charge of attempting to obtain financial advantage by deception.

The investigation also found that on a number of occasions Mr Mulder used Bendigo Health resources for his own private benefit, engaging in conduct contrary to the Victorian Public Sector Code of Conduct and Bendigo Health’s stated organisational values. The corrupt conduct allegations regarding Mr Mulder’s remuneration arrangements with Bendigo Health were not substantiated to IBAC’s satisfaction. Mr Mulder temporarily stood down as Chief Executive Office in February 2017.

IBAC also identified organisational and systemic corruption vulnerabilities at Bendigo Health that facilitated this conduct. IBAC made recommendations to address these issues.

The investigation was the subject of a special report to State Parliament in March 2017.

View the Operation Liverpool special report and responses to IBAC's recommendations

Operation Dunham

Operation Dunham information and documents are unavailable while the matter is before the courts.

Operation Warburton

Allegation

IBAC received a complaint alleging employees of the regulatory body misappropriated government funds for their own benefit, and that of an associated union to which they had personal ties. It was alleged a beachside property owned by a union member, was rented by the regulatory body to house disadvantaged apprentices but was instead used as a holiday house by a trade union secretary. Similarly, a Melbourne property rented for apprentices to live in was used for other purposes. The complainant also alleged the employees pushed for the regulatory body to pay more than $100,000 to support a union initiative because, ‘It’s what we do to keep the unions happy’. 

Outcome

Due to a complete absence of formal paperwork and controls, the IBAC investigation could not substantiate that the properties in question had been used for personal or other interests. There was no record to substantiate rental arrangements for the properties, and invoices signed by the regulatory body lacked the most basic of details, such as the address of specific rental properties. Additionally, there were no controls in place to ensure the state government funding package was spent as intended to support apprentices – as the money was deposited into the regulatory body’s main bank account used for day-to-day expenses. Nor did the regulatory body have any arrangement to review or audit the administration of the apprentice support program, and no enquiries were made to confirm the properties were being used as intended. 

The investigation found the arrangement between the regulatory body and union ran for nine years and involved four separate rental properties without any formal written arrangements, administration or audit. A total of $355,000 was paid to this program. 

While not constituting corrupt conduct, IBAC found there had been a breach of duty in allowing two senior employees to operate as trustees two years after their tenure expired, and that the pair breached their duty as trustees in supporting a union initiative, which they were personally involved in, and not declaring a conflict of interest. IBAC made recommendations to the regulatory body to improve their processes around accounting and record-keeping, and declaring and managing conflicts of interest. The recommendations have been accepted and acted upon.

Operation Forbes

Allegation

In April 2014, IBAC investigated an allegation that two members of a local emergency response unit engaged in corrupt conduct.

It was alleged between December 2012 and November 2013, fraudulent payments were made by two officers of the local emergency response unit to a company of which they were directors and shareholders. 

Outcome

The investigation determined that the allegations were unsubstantiated.

However IBAC’s investigation did uncover systemic corruption vulnerabilities at the responsible authority and recommendations were made to the relevant principal officer to assist that authority in addressing those vulnerabilities.

Operation Wakefield

Allegation

IBAC investigated bribery allegations concerning three former employees from a public body licensing team. Allegations were made that the employees had solicited bribes and/or loans from licensed and unlicensed applicants in the regulated service industry. In some instances, it was alleged that bribes were solicited in return for expediting the licence application process.

Outcome

IBAC’s investigation found that a former regulatory officer, whilst employed at the public body, solicited and received money from service provider licensees and applicants. It could not be determined whether the officer provided anything in return for the money received. Accordingly, it was determined that it was not in the public interest to pursue prosecution of the officer. 

IBAC also found that the bribery allegations relating to the two other former employees could not be substantiated due to insufficient evidence and the inability to corroborate witness accounts.

During the investigation, IBAC found systemic corruption vulnerabilities within the public body’s licensing team including: 

  • A number of current and former employees of the public body’s licencing team engaged in significant gambling, and at least two of those employees had incurred substantial debts. 
  • There were inappropriate relationships between some employees of the public body’s licencing team and members of the service industry regulated by the public body.
  • There was a failure to proactively conduct regular probity checks on service provider licensees. 

IBAC made recommendations to the Department of Justice and Regulation (DJR) to assist in strengthening the public body’s corruption prevention systems.

Operation Toucan

Allegation

In 2013, IBAC received information that a Victorian public sector employee working at a statutory body was releasing confidential information.

Outcome

While IBAC was unable to establish direct evidence of the employee passing on information, IBAC was able to establish the employee’s: 

  • links to persons of interest to law enforcement  
  • failure to disclose declarable associations 
  • proven unauthorised or otherwise inappropriate access to some agency-held information
  • suspicious conduct regarding other issues in connection with the person’s employment. 

The employee was the subject of disciplinary action by their employer on the basis of the information uncovered by IBAC, and was dismissed.

Operation Exmouth

Allegation

IBAC investigated allegations a senior employee employed by Places Victoria, Mr Carmine Petrone, dishonestly awarded contracts for work to entities with whom he had a familial relationship and which were effectively under his control. It was also alleged policies were flouted in a range of areas including procurement, declaration of conflicts of interest, information management, and recruitment.

Outcome

IBAC’s investigation found Mr Petrone’s conduct was inconsistent with the standards expected of a public servant prescribed in the Code of Conduct. He failed to declare or manage his clear conflict of interest, and failed to act impartially as he used his power to provide a benefit to his relatives.

The investigation found the majority of allegations against Mr Petrone were substantiated, and that he:

  • failed to declare his familial connection with the subcontractors
  • was directly and inappropriately involved in the management of subcontractors, and their invoicing
  • failed to follow Places Victoria policies in a range of areas including procurement, declaration of conflicts of interest, information management and recruitment.

IBAC also found a number of organisational or systemic vulnerabilities that were found to have contributed to this corrupt conduct going undetected and made recommendations to Places Victoria to address these matters, including improving recruitment processes, information security, and enhancing training for new staff.

Places Victoria has responded to IBAC’s recommendations, outlining action taken or providing its response to existing arrangements, which it believes are sufficient.

The investigation was the subject of a special report tabled to State Parliament in October 2016.

Operation Tambo

Allegation

This matter was a protected disclosure notification relating to allegations against an employee of the Department of State Development, Business and Innovation (DSDBI).

It was alleged that an employee of DSDBI had deliberately made procurement decisions to benefit a not-for-profit organisation to which he had links. The alleged amounts totalled $5,000 and $25,000. It was also alleged that in 2012, the employee interfered with a tender process to benefit an agency where a friend worked. It was stated that in the original tender review, the particular agency ranked fourth but following intervention from the employee, the agency was elevated to first.

Outcome

Our investigation did not substantiate any of the above allegations and no indictable offences were discovered. The matter was referred to the Victorian Ombudsman to consider.

Operation Helena

Allegations

Operation Helena was an IBAC investigation into allegations that former VicRoads employees obtained unlawful benefits from suppliers.

The allegations specifically included:

  • splitting of invoices to meet financial delegations
  • altering invoice details
  • obtaining benefits from suppliers, in the form of cash, meals and other gratuities
  • payment of invoices for works not completed or excessively charged
  • misappropriation of water rights attached to rural properties. 

Outcome

IBAC substantiated allegations that the former employees obtained unlawful benefits from suppliers and substantiated allegations that one of those employees directed contractors to split invoices, contrary to VicRoads policy. IBAC did not, however, find evidence that invoice-related fraud had occurred or that water rights had been misappropriated.

In the course of the investigation, IBAC identified several issues with VicRoads policies, processes and practices. The issues included an apparent culture within the relevant business unit of employees accepting gifts, benefits and hospitality from suppliers, and a failure to comply with VicRoads conflict of interest and procurement policies.

In May 2017, IBAC recommended that VicRoads review relevant policies, procedures and practices, review its audit and risk management programs, review its training, and communicate with suppliers as to why it is not appropriate to offer public sector employees, gifts, benefits and hospitality. In an interim response, VicRoads has advised that it has taken action including strengthening its gifts, benefits and hospitality policy, developing a procurement capability development program and introducing a supplier code of conduct.

Response to IBAC recommendations

Response from VicRoads (dated 27 October 2017) to recommendations arising from Operation Helena

IBAC publishes responses to our recommendations in order to inform the community about actions agencies advise they are taking, and to share learnings that may help other agencies improve their systems and practices.

Operation Panarea

Allegation

Operation Panarea was an investigation into a notification from VicRoads regarding allegations of suspected corrupt conduct relating to inappropriate procurement practices by employees at one of its depots. As part of Operation Panarea, IBAC interviewed relevant witnesses and reviewed the agency's procurement policies and procedures.

Outcome

While the allegation could not be substantiated, IBAC identified a number of issues and corruption vulnerabilities associated with VicRoads procurement practices:

  • instances of failure to comply with procurement processes
  • a lack of awareness of procurement policies and inadequate training among some staff
  • inadequate record keeping in relation to procurement
  • ineffective internal controls to identify non-compliance
  • lack of oversight by senior management including evidence of poor workplace performance and supervision.

As a result of this investigation, IBAC recommended that VicRoads review its procurement policies, procedures and practices to address the corruption vulnerabilities identified, including to ensure sound frameworks are in place in relation to:

  • fraud and corruption risks with procurement
  • procurement systems and controls
  • risk management and audits
  • staff awareness of procurement policies and procedures, including training.

IBAC requested that VicRoads provide a report to IBAC on the implementation of this recommendation within six months.

In August 2018, VicRoads Chief Executive Officer provided a response to IBAC, outlining the key actions it had taken to address the issues and corruption vulnerabilities identified in Operation Panarea.

VicRoads highlighted the work it has already undertaken to address the identified issues resulting from Operation Helena, and additional actions it is in the process of undertaking to further reduce corruption risks associated with procurement within the organisation.

VicRoads response is summarised as follows:

Corruption risks associated with procurement

Responsibility for the management of corruption risks associated with procurement has been defined at the strategic, tactical and operational levels within VicRoads. Defined governance and assurance structures to identify and mitigate patterns of inappropriate and non-complaint behaviours, form part of the organisation's 'Procurement Assurance Framework', which is underpinned by learnings from internal procurement activities, and learnings from IBAC reports, as well as educational documents and prevention activities associated with other government agencies.

VicRoads' 'Procurement Assurance Framework' applies a structured, forward-looking approach across the organisation, designed to significantly strengthen internal 'detection' and 'prevention' enforcement activities, supported by operational policies, procedures and reporting structures, all linked to the organisation’s Risk, Audit and Fraud & Corruption governance standards.

Procurement systems and controls

VicRoads' procurement systems and internal controls are shaped by intelligence and therefore prevention-focused. VicRoads has established a procurement action plan, enabled by technology, with defined roles and accountabilities to extract the optimal level of value from procurement activities, supported by internal support programs to help incorporate business experience to the procurement function, as well as providing risk and compliance insights.

VicRoads action plan is being implemented across the organisation in a phased approach, supported by the organisation's Procurement Division.

Staff awareness of procurement policies and training

VicRoads' 'Procurement Capability Development Plan' supports the organisation's approach to better decision making, improved governance and transparency and costs saving and operational excellence in procurement management. VicRoads' 'Procurement Capability Development Plan' has been in operation across the organisation for the past two financial years and is currently undergoing review and assessment to help identify improvements to procurement processes and to provide recommendations to track solutions.

VicRoads' 'Procurement Capability Development Plan' includes specific training in the conduct and management of procurement activities, including purchasing rules and guidelines, supported by online e-learning modules and interactive face-to-face procurement training courses that focus on procurement best-practice, conflict of interest, probity in procurement and contract management. VicRoads has also introduced targeted specialist training on procurement 'red flags', including Supplier Category Management & Relationships and Procurement Negotiation Training.

VicRoads has also developed specific 'Category Management and Assurance Dashboards' that support procurement staff and management representatives to visually identify expenditure by category, supplier and geographical area across the organisation. Implementation will commence from March 2019.

Risk management and audits

VicRoads has updated its 'Risk Management Framework' and developed a 'Compliance Management Framework' that aligns with its internal audit program of work for the 2018/19 financial year, that incorporates an internal audit of procurement systems and controls to provide independent assurance. Specific internal audit activities have been adjusted for high-risk areas to include a minimum of one internal audit per work group, each financial year. Any non-compliance events are reported to the Senior Leadership Team for review and decision.

IBAC publishes responses to our recommendations in order to inform the community about actions agencies advise they are taking, and to share learnings that may help other agencies improve their systems and practices.

Operation Tone

Allegation

Ambulance Victoria (AV) paramedics engaged in serious corrupt conduct, namely the theft, trafficking and use of drugs of dependence, and misappropriation of AV equipment.

Outcome

IBAC’s investigation uncovered a culture of illicit drug use and misappropriation of AV equipment by individuals and among certain groups of AV paramedics, particularly in the Barwon South West region. Based on evidence obtained during the investigation, IBAC considers it is likely that this conduct occurs beyond that identified in the investigation.

AV proactively responded during and after the investigation with measures to address the vulnerabilities identified by introducing new policies and practices that aim to minimise opportunities for the possession, use and misappropriation of drugs of dependence. AV has also taken steps to limit opportunities for misappropriation of AV equipment.

The investigation was the subject of a special report tabled to State Parliament in September 2017.

View the Operation Tone special report and response to IBAC's recommendations

Operation Hastings

Allegation

In February 2016, IBAC investigated allegations that a former officer of the then Electrotechnology, Printing, Information and Communications (EPIC) Industry Training Board (since renamed Future Energy Skills) had altered the final mark of a Licensed Electricians Assessment (LEA) examination, to enable a candidate to pass when a licensed assessor had previously evaluated the candidate as a fail.

To gain an electrician’s license in Victoria, Energy Safe Victoria (ESV), the independent electrical safety and technical regulator in Victoria, states that an apprentice electrician must successfully pass a LEA assessment. Future Energy Skills is an ESV approved assessor for the purpose of conducting LEA assessments.

Outcome

Following the investigation, IBAC concluded there was insufficient evidence to substantiate the allegation that the former officer had unlawfully altered the final mark of a LEA examination.

However, IBAC identified poor processes around EPIC Industry Training Board’s LEA assessments which could give rise to corruption vulnerabilities including:

  • the final examination mark was altered without consultation with either the initial assessor and/or the second assessor, which was contrary to ESV’s assessment rules
  • examinations were marked in pencil and the name and signature of the assessor and the date of marking and review were not consistently recorded on examination, undermining the accountability of the assessment process
  • insufficient storage of examinations
  • no record of who accessed the database where EPIC Industry Training Board stored assessment results.

In November 2016, IBAC recommended the EPIC Industry Training Board review and strengthen its processes in relation to LEA assessments. IBAC also recommended that ESV audit previous LEA assessments undertaken by EPIC Industry Training Board to confirm they comply with ESV’s assessment rules.

Response to IBAC recommendations

Response from Future Energy Skills (formerly EPIC Industry Training Board) to recommendations arising from Operation Hastings

IBAC publishes responses to our recommendations in order to inform the community about actions agencies advise they are taking, and to share learnings that may help other agencies improve their systems and practices.

Operation Denmark

Allegation

IBAC received information alleging that a member of the public had offered bribes to employees of Greater Melbourne Cemetery Trust (GMCT) in return for allocating a grave site at a particular cemetery. It was alleged that one staff member facilitated the transaction and accepted money from the member of the public.

Outcome

Following the investigation, IBAC concluded there was no evidence that the GMCT employee had accepted money to facilitate the grave purchase.

However, in the course of the investigation IBAC found potential corruption vulnerabilities, including:

  • high demand for grave sites (a limited resource) is a contributory factor for bribery attempts, and is likely to continue to be an issue for GMCT
  • potential under-reporting of offers of gifts, benefits and hospitality. 

IBAC made a recommendation to GMCT to review and strengthen its policies and procedures to address the vulnerabilities identified.

Response to IBAC recommendations

Response from the Greater Metropolitan Cemeteries Trust to issues identified in Operation Denmark

IBAC publishes responses to our recommendations in order to inform the community about actions agencies advise they are taking, and to share learnings that may help other agencies improve their systems and practices.


Operation Wyong

Allegation

IBAC received information that a man had attempted to bribe a public official to secure multiple grave sites at a suburban Melbourne cemetery, over and above what the cemetery allowed and could accommodate. 

An IBAC investigation examined:

  • the conduct of the individual at the centre of allegations
  • the conduct of employees
  • the adequacy of the cemetery’s processes and systems. 

The IBAC investigation was accompanied by a targeted internal audit by Greater Metropolitan Cemeteries Trust of relevant gravesites and burial records.

Outcome

Following that investigation, IBAC brought charges against the person who allegedly attempted to bribe an employee of the cemetery trust. In December 2014, a Point Cook man was convicted of attempting to bribe a public official and was fined $10,000.

IBAC did not establish direct evidence of corruption by cemetery employees. However, we did establish issues with GMCT’s record keeping, staff training and internal policies. In response, GMCT took steps to improve its systems and processes (including replacing out-dated manual systems), its policies and procedures, recruitment processes and ethics training.